SOUTH ASIAN DIALOGUE ON POVERTY AND HEALTH HELD IN BANGALORE 15TH - 18TH NOVEMBER 1999
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RF_COM_H_70_A_PART_2_SUDHA
Rural Poverty and Its Alleviation in India
N Kakwani
K Subbarao
To understand the impact of economic growth on poverty, it is important to measure separately the impact
of changes in average income and income inequality on pbverty. This paper makes an attempt in this direction.
It examines past trends in the distribution and growth of consumption and assesses their relative impact on the
poor and the ultra poor, over time and across states. The paper addresses the following questions: How has the
distribution of per capita consumption changed over time across the states, and to what extent it has nullified
the beneficial impact of growth on poverty? How have (he poor and the ultra poor fared in the wake of changes
in consumption and its distribution? What have been the regional patterns and to what extent can these patterns
be explained by our knowledge of the characteristics and public interventions in operation in different regions/states?
The authors consider the potential indirect role of agriculture and manufacturing, as well as the contribution
of direct anti-poverty programmes that have been in operation for over a decade now and the trends in social
sector expenditures, and their outcomes.
MUCH has been written about poverty in
India over the last two decades. In the initial
years considerable attention was devoted to
the estimation of poverty. More recently,
Serious attempts have been made to analyse
Pne facts explaining poverty across regions
and over time. While controversy still
prevails over both estimation and explana
tion, several insights have been gained, the
foremost among them being the significant
impact of a faster rate of growth of agri
cultural output per head on the incidence of
poverty.
In this debate on poverty in India, the two
issues that attracted much attention are:
(a) whether or not economic growth con
tributed to a reduction in the incidence of
poverty (i e, the existence or otherwise of the
so-called ‘trickle-down’ mechanism), and
(b) whether or not economic growth has
been accompanied by an increase in inequa
lity of income or consumption. In the past,
analysts have examined these issues by look
ing at the distribution of assets (land) or in
come or consumption in the high and
slow-growing districts/states, often using
single-year cross-section data. To understand
the impact of economic growth on poverty,
|’t is important to measure separately the im"pact of changes in average income (con
sumption) and income (consumption)
inequality on poverty, over time. This paper
makes an attempt in this direction in that
it examines past trends in the distribution
of growth of consumption and assesses its
relative impact on the poor and the ultra
poor, over lime and across states of India.
Using the National Sample Survey data
for fifteen major states of India for 1972-73,
1973-74, 1977-78 and 1983, the paper ad
dresses the following questions.
How has the distribution of per capita
consumption changed over time across the
states, and to what extent has it nullified the
beneficial impact of growth on poverty?
How havt the poor and ultra poor fared in
the wake of changes in consumption and its
distribution? What have been the regional
patterns and to what degree have these pat
terns been explained considering our
A-2
knowledge of the structural characteristics
of these slates and the state-wise perfor
mance indicators of anti-poverty pro
grammes?
This is followed by an analysis of India’s
poverty alleviation strategies: The potential
indirect role of agriculture and manufactur
ing, as well as the contribution of direct
poverty alleviation interventions are analys
ed, against the backdrop of the results per
taining to poverty and inequality.
In particular, we examine the extent to
which the regional allocation of funds for
direct poverty alleviation programmes is
sensitive to the regional distribution of the
poor and the ultra poor, and whether the
recent evidence on the impact of these pro
grammes is consistent with the observed
patterns in poverty and inequality.
So far the debate on poverty has focused
exclusively in terms of ‘income’ or ‘expen
diture’ needed to command the critical
minimum basket of goods. This concentra
tion of attention on ‘income’ has resulted in
the neglect of other influences—notably
education and health—which expand and
ensure the long-run capabilities of the
population.
Concluding sections of this paper deal
with the trends in social sector expenditures
and their outcomes, and assesses the perfor
mance of different states in relation to their
perceived needs. The last section ties
together the main findings and draws some
inferences for policy.
I
Methodology
To analyse poverty, we need to measure
the economic welfare of each individual in
the society. Although income is widely us
ed to measure economic welfare, it has many
serious drawbacks.1 One major drawback
of using income as a measure of economic
welfare is that it may have substantial fluc
tuations which are averaged out in the long
run. Therefore, it has been suggested that
consumption is a better indicator of the
actual economic position of-a household
than its current income.
The National Sample Surveys provide a
reasonably comparable time series data on
the levels and distribution of household con
sumption expenditures. These data are
available in grouped form, giving for each
group: (a) the percentage distribution of an
estimated number of persons, and (b) the
average consumer expenditures in rupees per
person. The monthly per capita expenditure
levels are generally grouped into 12 to 14 ex
penditure classes. To estimate poverty from
such data, one needs to employ some intrapolation device. A commonly used pro
cedure is to fit a density function to the
entire consumption range and then compute
poverty measures from the parameter of the
fitted function. Most of the Indian studies
have employed a two-parameter lognormal
distribution [Minhas, Jain, Kansal and
Saluja, 1987]. The difficulty with this
approach is that the lognormal distribution
tends to overcorrect the positive skewness of
the income distribution and thus fits poorly
to the actual data.
In the present paper we used a general
interpolation device proposed by Kakwani
[1980]. This method utilises, within each
expenditure range, a separate, continuous
differentiable function which exactly fits to
the data points. The inequality and poverty
measures are then computed by linking this
function. We used a polynomial of the third
degree to represent the Lorenz curve within
each income class, except the first and the
last open-ended classes. For the first and last
expenditure ranges, a Pareto curve is used
as a further refinement.
In this paper we have used per capita
household expenditure as a measure of
household economic welfare. Expenditure
comprises all expenditures incurred by the
household exclusively on domestic account
including consumption out of home-grown
produce or transfer receipts like gifts, loans,
etc. Tnc expenditure on household enter
prises is excluded from consunter expen
diture. Consumption out of home-grown
produce is evaluated at ex-farm rates. Ideally,
one should include the depreciated value of
Economic and Political Weekly
March 31, 1990
consumer durables which are in stock in the
household. Because of non-availability of
information on stock values, the monetary
value of consumer durables acquired during
the reference period is included in the total
expenditure. This may in some cases distort
the results on income inequality.
When the index of household welfare is
constructed, the next step involves the deter
mination of the welfare of the individuals
in the households. In this paper individual
welfare was derived by assigning every indi
vidual in a household a welfare value equal
to the per capita consumption for that
household. The validity of this assumption
is discussed in Kakwani (1986).
Once we have decided upon a suitable
index of economic welfare for individuals,
the next step is to find a threshold welfare
level below which an individual is poor. In
the present paper we have used two poverty
lines. The Planning Commission [1979] has
defined poverty threshold as the per capita
monthly expenditure of Rs 49.09 in rural
India at 1973-74 rural prices. Following the
Planning Commission, we adopted a round
figure of Rs 50 as our first poverty line. This
poverty line corresponds roughly to the per
capita daily requirement of 2,400 calories in
rural areas. Our second poverty line is equal
to the per capita consumption of households
of less than 80 per cent of the Planning
Commission’s poverty threshold of Rs 50.
We define the households whose per capita
consumption is below Rs 40 per month as
‘ultra-poor’; those whose physical personal
maintenance is unstable [Lipton 1988]. The
ultra-poor cut off point of Rs 40 cor
responds closely to the poverty line used by
Bardhan [1970] and Dandekar and Rath
[1971], which is Rs 15 at 1960-61 prices (this
line at 1973-74 rural prices is equivalent to
the per capita expenditure of Rs 42.5).
To compare poverty across different time
periods, one needs to adjust the distributions
given in current prices for price changes over
time. Minhas [1970] and Dandekar and Rath
[1971] used the national income deflator,
which has been criticised by Bardhan [1974].
This deflator does not reflect the prices
which people actually pay for their con
sumption goods. We have followed Bardhan
in using the Consumer Price Indices for
Agricultural Labourers (CPIAL) prepared
by the Labour Bureau. This index, con
structed on the basjs of the monthly retail
prices of 75 consumer items collected from
selected rural centres, uses the consumption
pattern of rural agricultural households
observed in 1956-57. A major objection that
has been raised against this index is that the
agricultural labour households constitute
only about 30 per cent of the total rural
population and the remaining 70 per cent
of the rural households which constitute a
large number of poor small farmers may
have a quite different consumption pattern
[Minhas et al 1987]. This objection is, of
course, relevant but Bardhan [1974] has
observed that the consumption patterns of
agricultural labour households are not very
Economic and Political Weekly
different from those of the other household
groups in the rural areas.
Recently, Minhas et al [1987] have con
structed a new price index which depicts the
movement of consumer prices for the entire
rural population. An attractive feature of
this index is that it is based on the consump
tion patterns observed in more recent years
than the CPIAL. This index is not available
as yet for individual states.
Minhas et al [1987] have applied the index
to compute the incidence of poverty in the
entire rural and urban areas of India for 5
different periods ranging from 1970-71 to
1983. They performed the poverty computa
tions on the All India expenditure distribu
tions which are published by the NSS
separately for rural and urban areas. These
aggregate distributions are derived from the
state distributions by means of population
weighted averages. This procedure of obtain
ing the aggregate distributions is not
satisfactory because of widely observed dif
ferences in price levels in different states. The
expenditures in current prices given for each
state have to be adjusted for state-wise price
differences before they can be aggregated.
Since this procedure was not adopted in the
Minhas et al study, their All I ndia estimates
of rural poverty are inaccurate notwith
standing the advance made on the construc
tion of a new price index.
To obtain comparable poverty levels across
different states, we need relative price levels
in the rural areas of different states in a given
year. Bhattacharya and Chatterjee [1974]
worked out these state-wise price relatives for
the year 1963-64, which also formed the
basis for the Bardhan [1973] study. Using
these price relatives and the CPIAL available
at the state level we worked out the state
specific poverty lines at the current prices
for the years 1972-73, 1973-74, 1977-78 and
1983.2 The results are presented in Table 1.
It can be seen from Table 1 that the
poverty line varies substantially across the
states as well as over time. These differences
arc attributable entirely to the variations in
Table 1: State-Specific-Poverty Lines for Different NSS Rounds
1972-73
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
All India
37
42
44
44
42
40
41
40
46
37
42
38
37
40
46
40
Poor
1973-74 1977-78
44
50
62
48
51
50
52
51
52
48
51
49
47
51
59
50
54
61
63
56
62
56
59
57
60
52
62
56
59
57
68
57
1983
1972-73
76
99
104
85
92
90
100
85
91
94
92
78
99
87
112
91
30
33
35
35
34
32
33
32
36
29
34
30
30
32
37
32
Ultra Poor
1973-74 1977-78
35
40
50
38
40
40
41
41
41
38
40
39
37
41
47
40
43
48
50
44
49
45
47
46
48
42
49
45
47
45
54
46
1983
14.5
79
83
68
73
72
80
68
72
75
73
62
79
70
89
72
Table 2: Inequality and Poverty: All India Rural*
Indicators
Per capita real consumer ex penditure
at 1973-74 prices
Theil's inequality
Within state inequality
Between state inequality
Total inequality
Poor
Head-count ratio (per cent)
Number of poor (millions)
Poverty gap ratio
Watts measure
Ultra-poor
Head-count ratio (per cent)
Number of poor (millions)
Poverty gap ratio
Watts measure
1972-73
1973-74
1977-78
1983
53.0
51.8
56.7
61.7
14.2
(92)
1.3
(8)
15.5
(100)
12.3
(93)
0.9
(7)
13.2
(100)
15.1
(91)
1.5
(9)
16.6
(100)
13.8
(88)
1.8
(12)
15.6
(100)
60.5
264.2
19.5
27.0
60.5
269.1
18.8
26.7
56.3
269.3
17.5
23.2
48.4
255.4
13.8
18.9
42.1
183.8
11.3
14.9
41.3
183.4
10.9
14.4
37.9
181.1
9.9
12.5
30.3
159.8
7.3
9.4
* Figures in the bracket give the per cent contribution of within and between states inequality.
March 31, 1990
A-3
the prices. For instance. West Bengal has the
highest poverty line for each of the 4 years;
it means that West Bengal is the most
expensive state to live. It also had the highest
inflation rate particularly over the 1977-78
to 1983 period.
The incidence of rural poverty for each
state was first computed using the state
specific poverty lines given in Table 1. The
poverty for all India rural level was then
derived from the rural poverty levels com
puted at the state levels. The trends in in
equality and poverty at the all India rural
level are discussed in the next section.
II
Trends in Inequality and Poverty:
All India Rural
Having decided.upon the poverty line, the
next step is to compute a poverty index
which would adequately measure the inten
sity of poverty. The head-count measure,
which is defined as the proportion of indi
viduals who have income below the poverty
line, is widely used to analyse poverty. This
is a crude poverty index because it does not
take account of the income-gap among the
poor. If the degree of misery suffered by an
individual is proportional to the income
shortall of that individual from the poverty
line, then the sum total of these shortfalls
may be considered an adequate measure of
poverty. Such a measure is called the poverty
gap ratio and can be written as:
g =
Ig(x)f(x)dx = H(z-/Z)/z
...(1)
where g(x) = ^z~x', z being the poverty line,
z
f(x) is the density function of income x, H
is the head-count ratio and n* is the mean
income of the poor.
The measure g will provide adequate in
formation about the intensity of poverty if
all the poor are assumed to have exactly the
same income, which is less than the poverty
line. In piactice, the income among the poor
is unequally distributed and, therefore, g
cannot be an adequate measure of poverty.
To make g sensitive to the income inequality
among the poor Sen [1976] proposed a
poverty measure which led to a large
theoretical literature on the measurement of
poverty.3 The main difficulty with Sen’s
measure is that it is not additively decom
posable. It is, therefore, awkward to com
pute its value for the all India rural
population using the state level rural expen
diture distributions. Moreover, the additively
decomposable poverty measures are useful
because they allow assessment of the effects
of changes in sub-group poverty to total
poverty.
In 1968, Watts proposed an additively
decomposable poverty measure wh::h can
be obtained by substituting g(x) - (logzlogx) in equation 1:
W = r,(logz-Iogx)f(x) dx
•o’
A-4
(2)
Although this is not a well known measure,
at the same time, it is simple to compute and
has all the important attributes: it satisfies
Sen’s monotonicity and transfer axioms and
also Kakwani’s [1986] transfer-sensitivity
axiom.
Watts’ measure is also closely related to
income inequality. If we substitute z = p,
H being the mean income of the entire
population and evaluate the integral
(equation 2) over the whole range of x, we
obtain:
«»
T= (f(logM-logx)f(x) dx
(3)
which is one of Theil’s (1967] two
well known inequality measures. An attrac
tive feature of this measure is that it can be
expressed as the sum of the between and
I within group inequalities.
In the present exercise we have used only
the additively decomposable poverty and in
equality measures. These measures have
been employed to derive poverty and in
equality in each of the 15 major states of
India. The results obtained from individual
states have then been aggregated to obtain
the all India situatior.e4
Table 2 presents the empirical results on
inequality and poverty measures aggregated
over the rural areas of 15 major states. The
conclusions emerging from this table are
summarised below.
It is interesting that the average consump
tion per capita fell by 2.3 per cent in 1973-74
(a normal crop year) from the previous year,
but rose impressively by 2.3 per cent per
annum over the period 1973-74 to 1977-78
and modestly at 1.5 per cent over the period
1977-78 to 1983.
The total inequality in per capita con
sumption (measured by Theil’s index) fell in
1973-74 modestly, rose dramatically by
1977-78 but fell again in 1983. Thus, in
general, during the periods of high growth
rates, the inequality has shown a tendency
to increase.
The between state inequality contributed
only eight per cent to the total inequality in
1972-73, which means that the within-state
inequality is the major determinant of the
inequality at the all India level. Therefore,
policies aimed at redistribution of income
and assets within the poorer states such as
Bihar undoubtedly deserve greater emphasis.
However, the share, of between state in
equality has grown monotonically from
eight per cent to twelve per cent between
1972-73 and 1983. Although the within states
inequality fell rapidly between 1977-78 and
1983, the between state inequality remained
more or less at the same level. Thus, the
regional disparities in average living
standards have shown a tendency to increase
over time.
As for poverty ratios, the ratio for ultra
poor fell to a greater extent than for the
poor. Between 1972-73 and 1973-74, there
was no change in the head-count ratio for
the poor but that for the ultra poor fell by
about one per cent. It appears that a
favourable crop benefits the ultra poor even
if the overall poverty ratio may not fall. Over
the period 1973-74 to 1977-78, poverty ratio
Table 4: Ranking of States by Per Capit,\
Real Consumption
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
Poor
1972- 1973- 197774
78
73
1983
12
8
3
11
14
9
10
4
6
2
15
13
7
5
1
12
5
1
10
14
9
11
6
8
3
15
13
4
7
2
10
5
3
12
14
11
8
7
2
4
15
13
6
9
1
12
4
2
11
13
8
10
6
3
5
15
14
7
9
1
Table 3: Trends in Average Consumption Per Capita (Real) by States, 1972-1983
States
Per Capita Consumption
(at 1973-74 Prices)
1972-7 3 1973-74 1977-78
1983
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
All India
53.8
50.2
46.8
58.8
83.5
56.6
51.5
51.5
45.7
47.9
88.8
69.3
50.9
53.3
42.0
53.0
58.3
52.0
45.2
56.8
71.8
52.3
53.8
49.3
50.8
44.9
74.8
66.0
51.3
50.3
40.6
51.8
65.1
49.2
45.9
63.3
75.1
57.9
63.0
52.5
48.7
50.5
93.0
75.3
53.6
59.6
43.6
56.7
75.9
57.4
45.3
72.6
83.0
65.3
73.0
59.5
61.0
52.8
93.2
81.3
56.7
60.1
46.9
61.7
Annual Growth Rates
1983
1973-74 1977-78
Over
Over
Over
1972-73 1973-74 1977-83
Per Cent Per Cent Per Cent
8.4
3.6
-3.4
-3.4
-14.0
-7.4
4.5
-4.3
11.2
-6.3
-15.8
-4.8
0.8
-5.6
-3.3
-2.3
Economic and Political Weekly
2.8
-1.4
0.4
2.7
1.1
2.6
4.0
1.6
-1.0
. 3.0
5.6
3.4
1.1
4.3
1.8
2.3
2.8
2.8
-0.2
2.5
1.8
2.2
2.7
2.3
4.2
0.8
0
1.4
1.0
0.2
1.3
1.5
March 31, 1990
/
(head-count) for the poor fell ai an annual
rate of 1.8 per cent. A similar pattern is
noticeable in the next period 1977-78 to 1983
when head-count ratio for the poor fell by
2.9 per cent, but by 4.4 per cent for the ultra
poor.
The trends in poverty gap ratio and Watts
measures arc similar. In general, the reduc
tion in poverty is more for the ultra poor
than for the poor, and the magnitudes of
reduction in poverty are higher for the
period 1977-78 to 1983 than for the former
period 1973-74 to 1977-78. This is an in
teresting result because 1973-74 to 1977-78
was a period of higher growth (2.7 per cent)
with increasing inequality whereas the
1977-83 period was characterised by a
somewhat lower per capita growth of con
sumption (1.7 per cent) but accompanied by
a substantial decrease in inequality. The
decrease in inequality was the major factor
which led to a substantial reduction in
poverty in the second period.
While no significant changes in the pat
tern of growth would be observed between
the two periods, the second period (1977-78
to 1983) witnessed a spate of direct anti
poverty interventions which were basically
aimed at improving the income and con
sumption levels of the low-income house
holds. If this strategy were working with
reasonable efficiency, one would expect a
reduction in consumption inequality in the
second period compared to that in the
former period (1973-74 to 1977-78). A
significant reduction in inequality in the
second period compared to that in the first
period is quite noticeable from the empirical
results presented in Table 2. An important
question arises: whether the improvement in
inequality can be attributed to the anti
poverty programmes which started around
1977-78. An attempt will be made to answer
this question in the next section where w'e
will analyse poverty trends at the state level.
Ill
State-wise Trends in Average
Consumption Per Capita and
Inequality
State-wise trends in average consumption
per capita are shown in Table 3. Over the one
year initial period (1973-74 over 1972-73),
Table 5: State-wise Patterns in Inequality in Consumption. 1972-73 to 1983
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
Gini Index
1973-74 1977-78
1983
1972-73
Thcil’s Measure
1973-74 1977-78
1983
0.28
0.19
0.29
0.31
0.29
0.28
0.31
0.31
0.32
0.32
0.32
0.32
0.28
0.28
0.31
0.29
0.21
0.28
0.24
0.30
0.29
0.32
0.29
0.27
0.27
0.28
0.28
0.28
0.24
0.30
0.295
0.198
0.260
0.260
0.280
0.300
0.330
0.300
0.290
0.270
0.290
0.340
0.330
0.290
0.290
0.127
0.062
0.141
0.127
0.135
0.129
0.163
0.159
0.172
0.162
0.163
0.170
0.129
0.131
0.156
0.143
0.075
0.128
0.094
0.142
0.131
0.167
0.137
0.123
0.117
0.127
0.131
0.125
0.095
0.148
0.142
0.064
0.109
0.105
0.123
0.150
0.189
0.143
0.133
0.119
0.135
0.196
0.177
0.141
0.138
0.151
0.057
0.112
0.136
0.147
0.174
0.212
D.188
0.143
0.153
0.165
0.184
0.174
0.151
0.143
Table 6: Annual Percentage Change in Inequality
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
All India
1972-73
to
1973-74
Gini Index
1973-74
to
1977-78
1977-78
to
1983
1972-73
to
1973-74
5.4
10.0
-5.1
-22.3
3.8
2.9
1.9
-6.1
-14.8
-15.5
-11.7
-12.1
1.1
14.4
-2.9
—
0.7
-3.1
-1.6
4.8
-0.3
3.2
2.8
3.5
2.2
3.4
3.1
3.8
4.1
5.8
-0.4
—
-0.4
1.3
-0.2
-2.2
-1.1
-1.3
-1.3
-2.3
-0.5
-2.3
-1.6
0.7
0.2
-0.6
-0.5
—
12.6
21.0
-9.2
-26.0
5.2
1.6
2.5
-13.8
-28.5
-27.8
-22.1
-22.9
-3.1
-27.5
-5.1
-14.8
Economic and Political Weekly
March 31, 1990
Thcil’s Measure
1973-74
1977-78
to
to
1977-78
1983
1.3
-6.6
-3.3
9.7
0.9
7.4
6.1
8.2
3.8
6.9
6.8
8.9
8.u
-0.9
-0.9
5.9
1 1972-73 to 1973-74:
(GPCC) = 18.7-0.38 (PCC), R2 = 0.47 <
(0.11)
2 1973-74 to 1977-78 :
'
(GPCC) = 1.9 + 0.07 (PCC), R2 = 0.14
(0.05)
3 1973-74 to 1983 :
1972-73
0.30
0.18
0.26
0.29
0.30
0.32
0.36
0.34
0.30
0.31
0.31
0.33
0.32
0.30
0.30
average consumption fell in most states. The
notable exceptions arc Andhra Pradesh,
Assam, Kerala, Maharashtra and Tamil
Nadu. Over the period 1973-74 to 1977-78,
all states except Assam have shown a positive
trend. The positive trend continued in the
following period as well as in all states except
Bihar, Maharashtra, Rajasthan and Punjab.
It is interesting to note that the two richest
states Haryana and Punjab suffered the
largest decline in the per capita real con
sumption during the 1972-73 to 1973-74
period. But in the subsequent periods, both
states maintained a positive growth in per
capita consumption. The two poorest states,
West Bengal and Bihar also suffered a
substantial decline in per capita consump
tion in the first period but in the second and
subsequent period, they managed to arrest
further decline.
To see if the level of per capita consump
tion is related to the growth rate, we
estimated the following regressions:
. -1.1
2.1
-0.5
-4.6
-3.2
-2.7
-2.1
-4.9
-1.3
-4.5
-3.6
1.2
0.3
-0.6
-< 6
-1.1
(GPCC) = 2.8-0.02 (PCC), R2 = 0.04
(0.03)
where
PCC : Per capita consumption
GPCC: Growth rate in per capita
consumption
The above relations suggest that in the
1972-73 to 1973-74 period, the growth rate
tended to be inversely correlated with the
level of per capita consumption, or in other
words, the richer states tended to have a
lower growth rate. In the subsequent periods
the relationship between the growth rate and
the level of per capita consumption was not
found to be statistically significant.
Table 4 presents the ranking of states by
per capita consumption. The results show
that the states which have substantially
improved their relative positions between
1972-73 and 1983 are Maharashtra and
Kerala notwithstanding slower growth of
agricultural output in both states. This is not
surprising, in view of the past record of these
states in poverty alleviation interventions
(Maharashtra’s Employment Guarantee
Scheme, and Kerala’s long-standing public
distribution system). The states whose
relative position has deteriorated during the
same period are Uttar Pradesh, Bihar,
Gujarat, Karnataka, and Tamil Nadu. The
remaining states maintained more or less the
same ranking during the periods considered.
Let us now turn to trends in inequality in
per capita consumption. These are shown in
Tables 5 and 6. Table 5 presents the levels
of inequality and Table 6, the annual percen
tage change.
The results show a wide variation in in
equality across states as well as over time.
In 10 out of 15 states, the inequality declined
A-5
during the 1972-73 to 1973-74 period. The
decline was highest in Gujarat (22.3 per
cent), followed by Orissa (15.5 per cent) and
Maharashtra (14.8 per cent). Assam regis
tered a substantial increase in inequality.
This situation changed dramatically during
the 1973-74 to 1977-78 period, during which
11 out of 15 states showed an increase in in
equality.
After looking at NSS published data we
noted that in Maharashtra and Rajasthan in
1977-78 there was a very large increase in ex
penditures on durables for the highest ex
penditure class. The expe,. ' * »re levels were
unacceptably high. Consu.. - ons with the
NSS office confirmed that these were errors.
We, therefore, adjusted the numbers to con
form broadly to the temporal changes in the
same states in the years immediately
preceding and following 1977-78. The in
equality estimates shown in Tables 5 and 6
reflect these adjustments. It is worth stress
ing, however, that since these unacceptably
high values occurred '.ily in the top expen
diture range, they would have little effect on
the poverty estimates.
It is quite evident that inequality increas
ed substantially in most states between
1973-74 and 1977-78, but this situation again
changed in the subsequent period. Inequality
declined in 12 out 15 states during this
period. Assam, Rajasthan and Tamil Nadu
were the only states which showed a slight
increase in inequality.
As noted earlier, the widespread decline
in inequality in the second period could be
due to the major policy change that took
place in the late 1970s related to the intro
duction of various anti-poverty programmes
whose main objective was to raise the con
sumption levels of the poor. It is possible
that this policy contributed towards an
overall reduction in consumption inequality
especially in the states with better rural ad
ministration.
The past research on poverty has shown
that the movement in poverty is related to
the movement in foodgrain production.
Ahluwalia [1978] demonstrated a statistically
significant inverse relationship between rural
poverty and agricultural performance for
India as a whole, suggesting that agricultural
growth by itself tends to reduce the incidence
of poverty. His analysis of the individual
states, however, did not provide a conclusive
evidence of this proposition. This issue clear
ly needs further investigation but a natural
question that arises from it is whether the
reduction in poverty is brought about by an
increase in per capita consumption or reduc
tion in the inequality of consumption, or
some combination of the two. From the
agricultural production point of view, 1983
was an excellent year. Foodgrain production
increased from 129.4 million tonnes in 1982
to 152.4 million tonnes in 1983. The
hypothesis which is yet to be tested is
whether the bumper food production leads
to a reduction in the inequality of per capita
consumption. If this hypothesis is valid, then
the widespread reduction in inequality bet
ween 1977-78 and 1983 could also be attri
A-6
buted to the highly favourable foodgrain
production in 1983.
Finally in this section we would like to in
vestigate whether there is a significant rela
tionship between growth rates in per capita
consumption and percentage changes in the
inequality of consumption. To do this, wc
estimated the following regressions.
1 1973-74 to 1977-78:
GGI = 0.38 + 0.82 (GPC), R2 = 0.42
(0.29)
2 1977-78 to 1983:
GGI = 0.86 1-0.03 (GPC), R2 = 0.001
(0.24)
where
GPC = Growth rate of per capita
consumption
GGI = Growth rate of the Gini index
The relations suggest that the growth rate
in consumption per capita is positively and
significantly related to the growth rate in the
Gini index. It means that the faster growth
rate in consumption tends to introduce
greater inequality.5 The equation relating to
the first time period (1973-74 to 1977-78) in
dicates the stronger impact of growth on in
equality than that in the second period. It
is interesting that the adverse impact of
growth on inequality is to be observed only
in the first period, but not in the second
period. As argued above, although the fac
tors that may have contributed to the.virtual
absence of this relationship in the second
period are difficult to establish empirically,
it is at the same time difficult to dismiss en
tirely the role of anti-poverty interventions
introduced in this period.
IV
Regional Trends in Poverty
The regional trends in poverty for the
poor and ultra poor are shown separately in
Tables 7 and 8, respectively. Each of these
tables presents results on both head-count
and poverty-gap ratios. The numerical
results of Watts’ measure are presented in
Table 1 of the Appendix.
For the ‘poor’, the annual change over the
first two years 1972-73 and 1973-74 was
negative for Andhra Pradesh, Assam, Gu
jarat, Kerala and Maharashtra; almost no
Table 7: Trends in Head-count Ratio and Poverty Gap Ratio eor Poor by States,
/
1972-73 to 1983
1972-73
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
All India
56.4
59.6
67.3
53.8
23.2
52.5
63.6
64.7
75.4
68.5
22.6
40.9
61.6
58.3
75.6
60.5
Head-Count Ratio
1973-74 1977-78
53.7
54.9
70.6
48.5
37.7
60.0
60.9
64.9
61.9
69.5
30.0
40.9
61.8
60.4
77.6
60.5
43.6
62.1
69.0
44.0
31.1
54.0
51.7
64.0
66.8
63.7
19.0
34.1
61.1
52.5
73.4
56.3
1983
1972-73
Poverty Gap
1973-74 1977-78
30.2
43.7
70.2
28.5
20.8
42.6
39.6
51.3
48.2
56.2
15.7
31.7
56.3
49.4
67.9
48.4
16.4
13.4
23.5
15.2
4.6
15.3
21.1
21.3
26.6
24.8
4.8
11.4
18.7
17.8
29.8
19.5
14.8
13.0
24.1
11.7
9.1
18.5
20.4
21.4
19.0
24.4
6.6
10.3
18.8
17.0
31.1
18.8
11.6
13.9
22.6
11.9
7.2
17.3
16.8
21.4
22.4
21.1
4.2
9.4
19.8
14.6
27.1
17.5
1983
6.7
8.3
23.0
5.3
4.0
12.1
9.9
14.2
12.7
16.7
2.9
8.3
18.1
13.6
23.3
13.8
Table 8: Trends in Head count Ratio and Poverty Gap Ratio for Poor by States,
1972-73 TO 1983
States
1972-73
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Puniab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
All India
37.5
28.6
49.5
34.2
10.8
33.1
46.3
47.5
56.3
50.8
11.2
24.9
43.1
37.9
6I.I
42.1
Head-Count Ratio
1973-74 1977-78
31.7
26.8
52.4
25.1
18.6
42.5
42.1
48.2
40.6
52.6
14.4
22.8
39.8
41.2
62.5
41.3
25.1
30.1
48.7
25.2
14.3
37.7
35.9
47.4
48.8
46.1
7.7
20.3
43.5
32.0
56.5
37.9
1983
1972-73
Poverty Gap
1973-74 1977-78
1983
14.5
17.9
50.3
11.1
8.5
27.0
22.2
31.6
28.3
35.7
6.2
18.0
39.1
31.1
48.6
30.3
9.2
4.9
14.4
7.6
1.9
8.3
12.8
12.5
15.9
15.0
2.0
5.6
10.8
9.3
20.3
11.3
10.9
5.8
15.0
5.0
3.6
10.2
11.8
12.7
10.0
14.5
2.8
4.8
10.0
8.7
20.9
10.9
5.8
5.0
13.1
5.7
3.0
10.2
9.8
13.1
13.4
12.9
1.9
5.0
11.4
7.1
17.0
9.9
2.9
2.7
13.4
1.8
1.4
6.4
4.6
7.2
5.9
9.4
0.9
4.1
10.5
7.1
14.1
7.3
Economic and Political Weekly
March 31, 1990
change for Madhya Pradesh, Rajasthan and
Thmil Nadu, and positive (poverty incidence
decreased) in the states of Bihar, Haryana,
Karnataka, Orissa, Punjab, Uttar Pradesh
and West Bengal. It is interesting to observe
that the two richest states, viz, Punjab and
Haryana registered a substantial increase in
poverty between the first two years.
During the (1973-74 to 1977-78) period the
head-count ratio for the poor was reduced
in 13 states; the 2 states where it increased
are Assam (3.1 per cent) and Maharashtra
(1.9 per cent). The head-count ratio for the
ultra poor was reduced only in 11 states, Gu
jarat and Tamil Nadu were the 2 states where
the head-count ratio for the poor decreased
whereas that for the ultra poor increased.
Between 1977-78 and 83, poverty reduced
in all states except in Bihar—where it increas
ed slightly. Thus, the decline in poverty was
more rapid and widespread during this
period compared to that in the previous one
The same conclusion seems to emerge what
ever poverty measure is used. Also, sustain
ed and significant decline over the two
periods could be noticed only for Andhra
Pradesh, Haryana, Kerala, Orissa, Punjab
and West Bengal.
Table 9 gives the ranking of states by head
count ratio for both poor and ultra poor.
The states have been ranked in the descen
ding order of poverty. There has been a
substantial change in the ranking. The states
which have considerably improved their rela
tive positions over the 1972-73 to 1983 period
are Andhra Pradesh, Gujarat, Kerala and
Maharashtra. It is interesting that these
results corroborate well with the trends in
nutritional status of the ultra poor
[Subbarao, 1989], which showed an improve
ment in these 4 states during 1970-80. Again,
while it is difficult to establish empirically
the reasons for relatively improved perfor
mance in terms of reduction in poverty and
malnutrition in these 4 states, it is worth
mentioning that Andhra Pradesh and Gu
jarat’s economic growth was impressive dur
ing this entire period, Maharashtra has had
a significant intervention in the form of
Employment Guarantee Scheme and Kerala
had substantial social sector investments and
an effective public distribution system. The
relative positions of Bihar, Tamil Nadu and
Uttar Pradesh have deteriorated—states
which have had neither an impressive record
of economic growth, nor substantial inter
ventions providing effective social security.
It is interesting to observe that the relative
position of Assam is considerably higher on
the basis of ultra-poverty than that on total
Table 9: Ranking of States by Head < ount Ratio.- Poor and Ultra Poor
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
Poor
1972-73
1973-74
1977-78
10
8
4
II
14
12
6
5
2
3
15
13
7
9
1
II
10
2
12
14
9
7
4
5
3
15
13
6
8
1
12
6
2
13
14
8
10
4
3
5
15
13
7
9
1
Ultra Poor
1983
1972-73
12
8
1
13
14
9
10
5
7
4
15
II
3
6
2
1973-74
1977-78
1983
10
11
3
12
14
5
6
4
8
2
15
13
9
7
1
12
10
3
11
14
7
8
4
2
5
15
13
6
9
I
12
11
1
14
14
8
9
5
7
4
15
10
3
6
2
9
12
4
10
15
11
6
5
2
3
14
13
7
8
1
Table 10: Growth and Inequality Effects on Head-count Ratio (Poor)
States
1973-74 to 1977-78
Inequality
Total
Growth
Growth
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
All India
-5.2
2.5
-0.4
-5.9
-1.7
-3.5
-5.5
-1.7
-10.8
-2.8
-16.2
-24.1
-1.4
-6.6
-1.3
-4.2
0.1
0.6
-0.2
3.5
-3.0
0.9
1.5
1.4
12.0
0.6
-5.4
19.7
1.1
•3.2
-0.1
2.4
-6.3
-7.0
0.3
-5.2
-4.5
-3.2
-3.9
-2.8
-5.6
-1.2
-0.1
-2.9
-1.3
-0.2
-1.2
-2.2
Economic and Political Weekly
-5.1
3.1
-0.6
-2.4
-4.7
-2.6
-4.0
-0.3
-2.0
-2.2
-10.8
-4.4
-0.3
-3.4
-1.4
-1.8
March 31, 1990
1977-78 to 1983
Inequality
Total
-0.2
0.8
0.0
-2.4
-2.6
-1.0
-0.8
-1.1
-0.2
-1.1
-3.3
1.6
-0.2
-0.9
-0.2
-0.5
— 6.5
-6.2
0.3
-7.6
-7.1
-4.2
-4.7
-3.9
-5.8
-2.3
-3.4
-1.3
-1.5
-1.1
-1.4
-2.7
poverty. This discrepancy is mainly attri
butable to a very low degree of inequality
in the predominantly tribal Assam which
favours the ultra poor more than the poor.
Finally in this section we attempt to
answer the question whether the rate of
poverty reduction was greater or smaller in
the poorer (richer) states. For this purpose
we estimated the following regressions.
1973 to 1977-78:
GHP = -11.8 + 0.16HP, R2 = 0.41
(0.05)
GHUP =-7.2 + 0.12HUP, R2 = 0.13
(0.09)
1977-78 to 1983:
GHP = -6.4 + 0.05HP, R2 = 0.10
(0.04)
GHUP = -8.4 + 0.07HUP, R2 = =0.07
(0.08)
where
HP = Head-count ratio for the poor
HUP = Head-count ratio for the ultra poor
GHP = Growth rate of the head-count ratio
(poor)
GHUP = Growth rate of the head-count
ratio (ultra poor)
The relationship between HP and GHP
is significant at the five per cent level in the
first period (1973-74 to 1977-78) but it
becomes insignificant in the second period
(1977-78 to 1983). It means that in the first
period, the rate of reduction in poverty tend
ed to be smaller in the poorer states. How
ever, this relationship does not hold for the
ultra poor. In the second period, the rela
tionship between the growth in poverty and
the level of poverty was found to be insignifi
cant for both the poor and the ultra poor.
In the following section, we separately ex
amine the effect of growth and inequality
of consumption on poverty across the states,
and analyse their changing roles in poverty
reduction over time.
V
Impact of Economic Growth and
Inequality on Poverty
Suppose 6 is a poverty index which will
be a function of 3 factors: (1) poverty line
income z, (2) the mean per capita consump
tion of the society, & and, (3) consumption
or income inequality. Inequality can be
measured by a single inequality index (many
of which are available in the literature), but
more generally it should be represented by
the parameters of the Lorenz curve. We
assume that the poverty line z is fixed., then
we can write
de =
+ e al dm,
i-idnr
(4)
where m,, m2,...mk are the parameters of
the Lorenz curve. This equation allows us
to decompose the change in poverty into two
components: (1) the impact of growth on
poverty when the distribution of income
does not change, and (2) the effect of income
redistribution when the total income of the
A-7
society remains unchanged.
It is obvious that if the growth rate of con
sumption per capita is positive, the first com
ponent in equation 4 will always be negative
The second component can be both negative
and positive. If there is any ‘trickle-down’
mechanism at work, we should expect the
second component in equation 4 to be either
zero or negative It is worth mentioning that
even if the inequality measured by the Gini
index or some other measure has increased
during the observation period, the second
component in equation 4 can still be either
zero or negative. In this section we will pro
vide quantitative estimates of each of the
two components of equation 4 which would
enable us to assess the extent to which the
‘trickle-down’ mechanism is operating in
each of the 15 states as well as at the India
level.
It is perfectly legitimate to argue that high
initial inequality levels may act as a con
straint on economic growth. Our analysis
does not answer this question of the effect
of inequality of growth. In this paper, we
basically concerned with the ex post
IRsessment of the impact of whatever growth
has taken place on poverty reduction in dif
ferent states. Notwithstanding the limitation
of our inability to capture causality in its
entirety, our analysis nevertheless strongly
complements previous attempts [e g,
Ahluwalia 1978], which focused exclusively
on regressing poverty on agricultural output
per capita at the all India level.
We adopted the following procedure to
compute the components of equation 4.
Let Hj and H, be the head-count ratios
for the first and the second periods, respec
tively; the percentage change in poverty bet
ween the two periods will be (H2-H])/Hr
To compute the growth effect on poverty, we
assume that the Lorenz curve in the second
period is the same as in the first period, but
the mean consumption has changed. Sup
pose L, (p) is the Lorenz curve in the first
period and /x, the real mean consumption
in the second' period, then H2’ given by
= 4will be the head-count ratio in the second
period under the assumption that the in
equality in the distribution remained the
same in the two periods. Thus, the growth
effect on poverty will be given by H,*/Hj,
which will be negative (positive) if n2 is
greater (less) than
(the mean consump
tion in the first period). The effect of income
redistribution on poverty will then be given
by the difference between the total percen
tage change in poverty, viz, (Hj-H^/H. and
the growth effect, as measured by
(Hj’-Hp/H,. Given H,, H2 and H2‘, one
can compute the corresponding values of
any poverty measure, which would in turn
provide the estimate^ of the growth and the
inequality effects for that poverty measure.
The numerical estimates of the growth
and inequality effects on head-count ratio
are presented in Tables 10 and 11 for the poor
and the ultra poor, respectively. Thble 12
shows the estimates of these effects on the
A-8
poverty gap ratio for the poor.
concluded that the trickle down effects ot
At the all India level total poverty declined
growth were more dominant in the second
at an annual rate of 1.8 per cent between
period. However, in view of these interven
1973-74 and 1977-78. If the inequality as
tions, the favourable effects of inequality
measured by the Lorenz curve had not
reduction on poverty in this period could be
changed between the two periods, the pover
attributed at least partly to these direct
ty would have declined at an annual rate of
attacks on poverty.
4.2 per cent. Thus, the change in the relative
The inequality effect was positive in
distribution which occurred between 1973-74
almost all the states (exceptions being
and 1977-78 resulted in an increase in pover
Haryana, Bihar and West Bengal), during
ty at an annual rate of 2.4 per cent. A less
the first period (1973-74 to 1977-78). The
than proportionate share of the benefits of
reduction in poverty which took place in
high growth rates during this period trickled
most states was due to the high growth rates
down to the poor.
which more than compensated the adverse
In the period between 1977-78 and 1983,
effects of increasing inequalities in this
total poverty declined at an annual rate of
period. The states, where change in .inequali
2.7 per cent. This faster decline in poverty
ty had a high and unfavourable effect on
occurred despite a slightly lower rate in the
poverty wore Gujarat, Maharashtra, Punjab,
per capita consumption observed in this
Rajasthan and to some extent, Uttar
period. However, the impact of growth on
Pradesh. However, this situation changed in
poverty continues to be high at -2.2 per cent.
the second period. In almost all the states,
The change in the distribution contributed
the poor benefited proportionally more than
to a modest reduction in poverty at an an
the non-poor. The states in which the poor
nual rate of 0.5 per cent. Although the
benefited proportionally more than the nongrowth rate was low in the second period,
poor in the second period arc Haryana, Gu
the poor benefited proportionally more than
jarat, Maharashtra, Rajasthan and Punjab.
the non-poor. In the absence of direct at
The effects of growth and inequality on
tacks on poverty aimed at raising the con poverty reduction was generally low in the
sumption levels of the poor, one could have
states with low consumption per capita.
Table 11: Growth and Inequality Effects on Head-count Ratio (Ultra Poor)
States
1973-74 to 1977-78
Growth
Inequality
Total
Growth
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
All India
-7.7
5.8
-0.7
-8.6
-3.8
-5.5
-8.4
-2.8
-15.8
-5.1
-29.3
-29.9
-2.3
-12.3
-2.4
-6.2
-5.7
2.9
-1.8
0.1
-6.4
-3.0
-3.9
-0.4
4.7
-3.2
-14.5
-2.9
2.2
-6.1
-2.5
-2.1
-8.5
-11.9
0.4
-7.1
-6.5
-5.0
-5.9
-4.4
-8.5
-1.7
0.0
-3.6
-2.0
-0.4
-2.1
-3.2
-2.0
-2.9
-1.1
-8.7
-2.6
2.5
4.5
2.4
20.5
1.9
14.8
27.0
4.5
6.2
-0.1
4.2
1977-78 to 1983
Inequality
Total
-1.0
2.9
0.2
-6.7
-2.5
-0.9
-2.5
-2.7
-0.9
-2.8
-3.9
1.4
0.1
-0.1
-0.6
-0.8
-9.5
-9.0
-0.6
-13.8
-9.0
-5.9
-8.4
-7.1
-9.4
-4.5
-3.9
-2.2
-1.9
-0.5
-2.7
-4.0
Table 12: Growth and Inequai ify Effects on Poverty-Gap Ratio (Poor)
States
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
All India
1973-74 to 1977-78
Growth
Inequality
Total
Growth
-7.4
4.3
-0.7
-8.8
-3.5
-5.9
-8.3
-3.3
-15.7
-5.6
-17 2
-29.8
-2.5
-11.8
-3.0
-6.1
-8.1
-10.6
0J
-7.0
-6.1
-4.9
-5.9
-4.7
-9.0
-1.8
-0.4
3.8
-2.1
-0.4
-2.4
-1.7
1.5
-2.6
-0.9
9.2
-2.2
4.2
3.6
3.3
19.9
2.0
6.5
27.5
3.8
8.1
-0.4
4.3
-5.9
1.7
-1.6
0.4
-5.7
-1.7
-4.7
0
4.2
-3.6
-10.7
-2.3
1.3
-3.7
-3.4
-1.8
1977-78 to 1983
Total
Inequality
-1.4
1.7
-0.2
-6.7
-4.0
-1.4
-3.3
-2.5
-0.8
-2.4
-6.1
1.6
0.5
-0.9
-0.3
-1.0
Economic and Political Weekly
-9.5
-8.9
0.3
-13.7
-10.1
-6.3
-9.2
-7.2
-0.8
-4.2
-6.5
-2.2
-1.6
-1.3
-2.7
-2.7
March 31, 1990
VI
Responsiveness of Poverty to
Growth and Inequality Changes
Even if growth is trickling down, because
of initial high inequality levels, the effect of
growth on poverty may be small. To see how
growth affects poverty, we computed the
poverty elasticities with respect to the mean
per capita consumption when the effect of
changes in inequality has been kept constant.
These elasticities which will be referred to
as growth elasticities have been derived by
Kakwani [1989] for all the existing poverty
indices.’The elasticities for the three pover
ty measures used in the present paper are:
Head-couMt ratio
- z^z^
H
Poverty-gap ratio
-
Watts’ measure
-—
**
where W represents Watts’ measure, H is the
head-count ratio, and p.' is the mean per
capita consumption of the poor.
The measurement of the effect of in
equality on poverty is a more difficult task
because inequality in distribution can
change in infinite ways. To get an idea of
the size of this effect we make a simple
assumption that the entire Lorenz curve
shifts according to the following formula:
L* (p) = L(p) - X[p- L(p)]
(5)
which implies that when X>0, the Lorenz
curve shifts downwards resulting in higher
inequality. It can be shown that X is equal
to the proportional change in the Gini in
dex. If X = 0.01, it means that the Gini index
is increased by 1 per cent. Thus, one can
derive the elasticity of a poverty measure
with respect to the Gini index using this prercedure.6 The elasticities for the 3 poverty
measures used in the present study are:
Head-count ratio
-
.
Poverty-gap ratio
-
f(z)
(u—u*)
of the income distribution increases by one
per cent, what would be the percentage in
crease in the mean income for poverty not
to increase at all? This can be answered with
the concept of the marginal proportional
rate of substitution (MPRS) between mean
income and income inequality.7 It is given
• by:
.
inequality elasticity
MPRS
- .____ °-f P0VCrty
8G /x
growth elasticity of
poverty
which can be computed for each poverty
measure.
Tables 10 and 11 present the growth and
inequality elasticities for the poverty-gap
ratio for the poor and ultra poor, respective
ly. The values of MPRS for the poverty-gap
ratio are presented in Table 12. -The conclu
sions emerging from these tables are sum
marised below.
Both growth and income elasticities have
a general tendency to increase over time, the
increase being slower in the poorer states.
Thus, the poverty ratio is becoming more
responsive to the changes in the mean in
come and income inequality. In the two
poorest states, viz, Bihar and West Bengal,
the elasticities have not changed much sug
gesting fairly stable distributions.
The inequality elasticity has increased
slightly faster than the growth elasticity in
most states. This pattern is quite evident
from the increasing values of the marginal
proportionate rate of substitution (MPRS)
presented in Table 15. This suggests that a
greater emphasis should be placed on the
growth oriented policies which at least main
tain the income share of the poor. But if the
inequality deteriorates during the course of
economic growth, poverty may increase even
with a faster economic growth because of
increasing inequality elasticity.
Since the values of MPRS arc generally
higher for the richer states, it would appear
imperative to follow consumption redistribu
tion policies even in the high growing states.
Both growth and inequality elasticities arc
considerably higher for the ultra poor than
for the poor implying that increasing in
equality will hurt the ultra poor more than
the poor. Also, the positive change in growth
rate will benefit the ultra poor more th.fl
the poor. Since the MPRS values are con
siderably higher for the ultra poor than for
the poor, the inequality reducing policies (in
comparison with the growth policies) will
have to play a more important role if the
Table 13: Growth and Inequality Elasticity on Poverty Gap (Poor)
States
Growth Elasticity
1973-74
1977-78
1983
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
All India
-2.6
-3.2
-1.9
-3.1
-3.1
-2.2
-2.0
-2.0
-2.3
-1.8
-3.5
-3.0
-2.3
-2.6
-1.5
-2.21
-2.8
-3.5
-2.1
-2.7
-3.3
-2.1
-2.1
-2.0
2.0
-2.0
-3.5
-2.6
-2.1
-2.6
-1.7
-2.22
-3.5
-4.3
-2.0
-4.4
-4.2
-2.5
-3.0
-2.6
-2.8
-2.4
-4.4
-2.8
-2.1
-2.6
-1.9
-2.48
Inequality Elasticity
1973-74
1977-78
1983
1.6
1.2
0.7
1.6
2.8
1.2
1.2
1.0
1.0
0.7
3.2
2.2
1.0
1.0
0.5
2.1
0.9
0.7
1.9
3.1
1.5
1.8
1.1
1.8
1.0
4.8
4.4
1.2
1.7
0.7
3.3
1.7
0.7
3.4
4.4
2.1
2.8
1.7
1.8
1.1
5.6
3.4
1.4
1.8
0.8
j
'
Table 14: Growth and Inequality Elasticity on Poverty-Gap (Ultra Poor)
H Qx-h)
-________
W h
where h is the harmonic mean of the income
distribution of the poor only.
.
Watts measure
The inequality elasticities of the poverty
gap ratio and Watts measures will always be
positive, i e, the higher income inequality
leads to greater poverty. For the head-count
measure this result is not always true. If
p <z, the head-count measure can decrease
with an increase in inequality. This result
casts down the usefulness of the head-count
measure for analysing the impact of in
equality on poverty.
Because the mean income and income in
equality each affects poverty, an important
question arises: What is the trade-off bet
ween mean income and income inequality?
Put differently, we may ask, if the Gini index
Economic and Political Weekly
States
Growth Elasticity
1973-74
1977-78
1983
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
All India
-1.9
-3.6
-2.5
-4.0
-4.2
-3.2
-2.6
-2.8
-3.1
-2.6
-4.1
-3.8
-3.0
-3.7
-2.0
-2.80
March 31, 1990
-3.3
-5.0
-2.7
-3.4
-3.8
-2.7
-2.7
-2.6
-2.6
-2.6
-3.1
-3.1
-2.8
-3.5
-2.3
-2.82
'
-4.0
-5.6
-2.8
-5.2
-5.1
-3.2
-3.8
-3.4
-3.8
-2.8
-5.9
-3.4
-2.7
-•3.4
-2.4
-3.15
Inequality Elasticity
1977-78
1983
11973-74
2.3
2.4
1.4
3.2
5.2
2.2
2.2
1.9
2.1
1.5
5.6
4.0
2.1
2.2
1.0
3.7
2.5
1.6
3.7
5.2
2.6
3.1
2.1
3.2
1.9
6.4
6.4
2.3
3.3
1.3
5.5
3.9
1.4
5.9
7.5
3.6
5.0
3.1
3.6
2.2
10.2
5.6
2.6
3.1
1.7
A-9
ultra poo are to be lifted out of their
desperate ..tuation.
rhe policies pursued by the government
since the mid-1970s with the objective of
raising the consumption levels of the poor
and the ultra poor, therefore, appear to be
basically sound responses to the observed ef
fects of growth and inequality analysed in
this part. In the following sections the ef
fectiveness of these strategies are evaluated
at the state level.
VII
Poverty Alleviation Policies
The government’s strategy for reducing
the incidence of poverty is based on a com
bination of accelerated overall growth and
targeted direct anti-poverty interventions. In
the long run, the outlook for poverty reduc
tion depends on: (a) the supply of, and the
demand for, labour, and (b) on the social
policies that help raise the basic capabilities
of people, especially education and health.
These aspects are analysed below.
(A)
Policies for Labour absorption
Given that the entrants to the labour force
are unlikely to register a downward trend
over the next three decades, the critical issues
are: (i) to what extent can future growth in
agriculture and outside agriculture absorb
the growing labour force? and (ii) to what
extent can direct interventions help in expan
ding self-employment and wage employment
especially among the ultra poor?
(i)
Agricultural Growth and Poverty
high or medium growth with low instability
account for only 27 per cent of the poor and
25 per cent of the ultra poor
Given the importance of agricultural pro
gress in poverty reduction, the important
questions arc: What are the prospects of
growth in the lagging regions? Would an ac
celerated growth in these regions lead to ade
quate labour absorption?
Reference was already made to the em
pirical evidence establishing the close link
between agricultural growth and poverty
reduction. Rao 11987] noted that the rate of
reduction in poverty incidence was lowest in
agriculturally lagging regions. Table 16 gives
the distribution of states classified by the dif
ferences in the rates of agricultural growth
and the degree of instability of growth. As
many as 70 per cent of the nation’s rural
poor as well as ultra poor are located geo
graphically in states with low or moderate
rates of agricultural growth with medium or
high instability. The regions experiencing
Recent evidence suggests a fall in aggre
gate employment elasticity of agriculture
over the 1970s [Bhalla, 1987] but this is a
composite estimate reflecting the experience
of diverse regions and crops. Employment
elasticities with respect to output continue
Table 15 Marginal Proportion Rate of Substitution between Growth and Inequai iiy
Poverty-Gap Ratio
Growth
Poor
Inequality
Total
Growth
Ultra Poor
1 nequality
0.6
0.4
0.4
0.5
0.9
0.5
0.6
0.5
0.4
0.4
0.9
0.7
0.4
0.4
0.3
0.8
0.3
0.3
0.7
0.9
0.7
0.9
0.6
0J
0.5
1.4
1.7
0.6
0.7
0.4
0.9
04
0.4
0.8
1.0
0.8
0.9
0.7
0.6
0.5
1.3
1.2
0.7
0.7
0.4
1.2
0.7
0.6
0.8
1.2
0.7
0.8
0.7
0.7
0.6
1.4
1.1
0.7
0.6
0.5
1.1
0.5
0.6
1.1
1.4
1.0
1.1
0.8
1.2
0.7
2.1
2.2
0.8
0.9
0.6
States
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
Total
1.4
0.7
0.5
1.1
1.5
1.1
1.3
0.90.9
0.8
1.7
1.6
1.0
0.9
0.7
Table 16: Distribution of Poor according to Levels of Growth and Instability in Foodgrains Production
Category
1
High growth and low instability
High growth and medium
instability
III High growth and high instability
IV Medium growth and low
instability
Medium growth and medium
V
instability
VI Medium growth and high
instability
VII Low growth and low instability
VIII Low growth and medium
instability
IX low growth and high instability
1
II
Per Cent of New Sown Area
with Rainfall
High
Medium
Low
(1,150 mm (750 mm
up to
and
to 1,150 750 mm)
above)
mm)
Rural
Popu
lation,
1983
3
4
5
6
7
8
Number
of Agri
cultural
Workers
Per 100
Hectares
of Net
Sown
Area,
1980-83
9
Punjab, Jammu and Kashmir
Haryana, Uttar Pradesh
5.3
8.4
20.5
64.1
74.2
27.5
3.2
19.6
0.9
18.7
NA
19.0
85
148
Gujarat
Andhra Pradesh, Himachal
Pradesh
Karnataka
7.3
1.0
25.0
66.0
67 7
33.0
4.5
8.7
2.0
4.5
2.73
3.9
83
145
9.4
24.3
66.3
5.1
4.4
4.6
95
Maharashtra, Orissa, Rajasthan
25.0
24.1
50.9
17.6
17.6
16.7
87
Assam, Kerala
Tamil Nadu, West Bengal
100.0
54.2
Nil
45.8
Nil
Nil
7.5
14.0
5.4
19.6
6.5
18.4
173
188
Bihar, M-dhya Pradesh
All India
63.5
30.7
33.5
35.8
3.0
33.5
19.8
100.0
26.9
100.0
26.1
130
120
States
2
Per Cent in
Poverty
Ultra
Poor
Popu
lation,
1983
Growth rate refers to the foodgrains production growth rate for the period 1961-1985: High-above 3.0; Medium -2.0 to 3.0; Low-below
2.0. Instability refers to the standard deviation in the annual output growth rates of foodgrains for the period 1961-1985; High-above
20; Medium-15 to 20; Low-below 15.
Source: All columns except 8, C H H Rao, S K Ray, and K Subbarao [1988]; column 8 was computed in this paper.
Note:
A-10
Economic and Political Weekly
March 31, 1990
to be higher in the low-wage eastern states
for all crops than in the rest of India. Dif
fusion of agricultural technology to the lowwage regions is bound to result in greater
labour absorption. This may be already hap
pening in eastern Uttar Pradesh with the
emergence of HYV rice as a major second
crop, although one may have to wait for
years for reliable empirical evidence.
Accelerating agricultural growth in the
eastern region, a region where our results
have shown the smallest reduction in pover
ty, calls for a significant reorientation of
science and technology policies as well as in
stitutional policies so as to help strengthen
the small farm sector. In particular, science
and technology policies have to focus on the
development of high-yielding crop mixes
that facilitate intercropping so that total out
put from a crop rotation is maximised. If
the country is to take advantage of the reser
in manufacturing and service sector employ
ment would be crucial in the coming decades.
Past experience is very disappointing.
Capital intensity in manufacturing was
maintained by a policy environment that
favoured existing workers and jobs. Labour
demand elasticity with respect to the wage
for the period 1973-74 to 1984-85 ranged bet
ween -0.7 and -0.8, implying a significant
trade-off between real wages and industrial
employment [Hanson and Sengupta, 1989].
There has been a rise in the real wage of
organised labour in both public and private
sectors in the 1980s contributing to slow
growth of employment in manufacturing.
Prospects for non-farm employment depend
on (a) fiscal and other measures to stimulate
light labour-intensive industry including ex
(ii) Non Agricultural Growth and Poverty port industry, and (b) public policy to
stimulate service sector (including rural in
In the long run, agriculture’s share in
formal sector). As of now, there has been
employment is bound to fall, so that-growth
no specific policy framework that encou
Tabi f 17: M\jor Povfrfy Ai i eviafion Programmes. 1987-88
rages labour-intensive manufacturing and
service and informal sectors.
A Financial Expenditures
Rs Million
voir of labour available in the small farm
sector in this region, this sector needs to be
strengthened both by technology and infra
structure policies that promote higher crop
ping intensities, and by institutional policies
that enhance their resource base, especially
consolidation of holdings, and credit and
marketing reforms [C H H Rao, S K Ray,
K Subbarao, 19891. Progress on all these
fronts has been far from satisfactory.
Rural non-farm activities—dairying,
poultry, fisheries, forestry and agro-processing—have been a major source of pover
ty redress in India. These activities are now
being encouraged through Integrated Rural
Development which is discussed in later
sections.
I Credit-based self-emplojment programmes:
a Integrated Rural Development Programme (IRDP)’
(Investment per beneficiary
Rs 4.471)
2 Wage employment programmes:
a National Rural Employment Programme (NREP)
b Rural Landless Employment Guarantee Programme (RLEGP)
c Maharashtra’s Employment Guarantee Scheme (MEGS)
3 Area development programme
a Drought Prone Area Programme
b Desert Development
c Watershed Development
19.000
7,850
6,480
2,650
900
900
500
2,400
39,780
1 per cent
9 per cent
As per cent of GDP
As per cent of plan outlay
B Physical Achievements, 1987-88
1987-88
4.2
1 Credit-based self-employment programmes:
a IRDP: Number of beneficiaries covered (million)
2 Wage employment programmes:
a NREP: Mandays of employment generated (million)
b RLEGP: Mandays of employment generated (million)
c MEGS: Mandays of employment (million)
370
100
150
Source: Progress Reports of the 20 Point Programme.
Ministry of Programme Evaluation.
Table 18: State-Wise Distribution of IRDP Funds and Poor
States
Percentage Distribution of
IRDP Expenditure, Poor Population
Ultra Poor
1988-89
(1983)
Population (1983)
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
All India
Economic and Political Weekly
8.6
1.7
12.8
3.0
1.6
4.5
2.6
9.7
8.0
4.0
1.6
4.2
7.2
21.3
9.0
100
March 31, 1990
5.01
3.24
17.44
2.73
0.86
4.56
3.30
8.66
7.95
5.27
0.77
3.53
7.32
18/23
11.12
100
3.9
2.1
20.0
1.7
0.6
4.6
3.0
8.5
7.5
5.4
0.5
3.2
8.2
18.3
12.7
100
(iii)
Direct Anti-Poverty Interventions
Since the mid-1970s, the central and the
state governments have launched numerous
direct anti-poverty interventions whose scale
and variety is so vast that it is not possible
to review them all in this paper. The impor
tant direct interventions launched with the
initiative of the central government are:
Integrated Rural Development Porgramme
(IRDP), National Rural Employment Pro
gramme (NREP), and the Rural Landless
Employment. Guarantee Porgramme
(RLEGP). There is also an important
centrally-sponsorbd programme for com
bating child and maternal malnutrition, i e,
the Integrated Child Development Services
(ICDS). At the state level, the notable pro
grammes are: Maharashtra’s Employment
Guarantee Scheme (MEGS); public distribu
tion systems in Kerala, Tamil Nadu, Gujarat,
and Andhra Pradesh (Rs 2-a-kilo scheme);
and Tamil Nadu Integrated Nutrition Pro
ject. With regard to each of these program
mes, there have been many evaluations and
much debate. In view of our finding that in
the second period, despite slower growth in
average consumption per capita, the pover
ty ratio fell largely due to a decline in in
equality in most states, an overall assessment
of anti-poverty programmes initiated during
this period is necessary. Any such assessment
of their overall impact, however, must begin
with the recognition of the fact that India
is experimenting in many directions to
reduce poverty-induced human suffering.
IRDP has been in operation long enough
to be realistically evaluated. Independent
analysts recognise that this programme has
channelled funds on a hitherto unprece
dented scale for creating supplementary in
comes from non-land assets among the
relatively poor all over rural India. During
the Sixth Plan period, assets worth some
Rs 50 billion were created and distributed
benefiting about 17 million families—by no
means a small achievement. During 1987-88,
A-ll
for the development of supportive infra
these households was the continued reluc
ihe fourth year of the Seventh Plan, another
structure and raise the incomes of the poor
4.2
million families were assisted with an in tance of the institutional credit agencies to
vestment of Rs 4,471 per family, or Rs 19
lend working capital on a regular basis even
at the margin, provided the choice of assets
after the households have proven their credit
are properly dovetailed with the level and
billion overall (see Table 17). So far, 1RDP
worthiness by promptly repaying the IRDP
reached about 25 per cent of India’s rural
structure of demand in the region; the assets
loans. In other words, IRDP enabled access
supplied were labour-intensive in character,
households.
State-wise shares of IRDP expenditures
to institutional credit for the poorest
and supporting marketing networks were
are compared with their shares in the
households as a one-shot injection, but failed
simultaneously promoted. Wherever these
population of the poor and the ultra poor
to open a channel of line credit on a conti conditions were satisfied, and the pro
in Table 18. On the basis of the incidence
nuing basis for the neediest households not
gramme reached the lower half of the poverty
of either poor or ultra poor population, the
withstanding their proven creditworthiness.
groups, its impact on the hard-core poor was
eastern states of Assam, Bihar and West
In brief, recent evidence suggests that the
not insubstantial. However, for sustained in
Bengal deserved higher allocations.
very order of investments in the IRDP is
come generation, it would be necessary to
There are numerous evaluations of IRDP—
such that it might be able to give impetus
ensure continued access to institutional
both by government departments and
Table 19: Measures oe Success or IRDP
private researches. In the past, most
assessments by the government have been
Per Cent
Per Cent
Per Cent
Per Cent
Major Slates
favourable, but micro studies of IRDP have
Intact and No
Investments
Eligible and
Eligible*
not been unequivocal in supporting the of
Credit Overdue Crossed Poverty
Intact**
Beneficiaries
ficial claims. However, the divergence bet
Lines***
4
ween macro indicators and micro
3
5
2
1
performance seem to be narrowing in recent
34
9
76
Andhra Pradesh
68
years. Also, ‘success’ or ‘failure’ depend on
4
38
61
Arunachal Pradesh
73
the criterion adopted for assessment. Thus,
6
10
27
70
Assam
Subbarao [1985] argued that the most
18
3
85
Bihar
76
Kringent criterion of “crossing the poverty
4
43
88
78
Gujarat
"ne” is inappropriate for judging the full
0
7!
46
15
Haryana
benefits of this programme, since house
29
87
45
85
Himachal Pradesh
holds way below the poverty line (the ultra
50
80
19
97
Jammu and Kashmir
poor) may register incremental incomes and
4
64
26
85
Karnataka
thus benefit from the programme, even if
74
5
19
89
Kerala
they are unable to cross the poverty-income
27
6
73
Madhya Pradesh
81
threshold.8 Pulley [1989] has shown that
30
10
69
Maharashtra
83
depending upon the criterion adopted, pro
7
19
68
Orissa
83
gramme success rate varied (see Table 19).
77
57
18
30
Punjab
On the basis of the criterion of “investments
9
48
15
72
Rajasthan
63
28
3
remaining intact’’ (which suggests that .Tamil Nadu
83
41
79
5
54
Uttar Pradesh
households are deriving incremental incomes
97
8
46
23
West Bengal
from the asset), the programme is doing
7
73
29
70
Average
reasonably well even in relatively low income
states like Bihar. But on the basis of the
Note: * Proportion of beneficiaries with pre-IRDP income
- 4800.
rigorous criterion of “crossing the poverty
•• Proportion of IRDP investments that remained fully operational after two years.
line”, the success rate was very low (see
**• Proportion of beneficiaries with pre-IRDP income - 4800 and post-IRDP
Table 19, columns 3-5). State-wise perfor
income = 6400 after two years in current price terms
mance also suggests in interesting relation
ship, between “percentage of eligible
Source: National Concurrent Evaluation of IRDP, Ministry of Rural Development, as
beneficiaries”, and the proportion crossing
quoted in Pulley [1989].
the poverty line. Barring in the hill states
(Himachal Pradesh, Jammu and Kashmir),
Table 20: NREP—State Wise Distribution of Employment
J he higher the proportion of eligible bene
ficiaries (i e, the lower the percentage of non
Per Cent
Employment
Percent Distribution of
poor) with low initial level of incomes, the
Women
(Million
Employment
Ultra Poor
Employed
Mandays)
Population
more difficult it is for them to cross the
poverty income threshold; the proportion
Andhra
Pradesh
34.0
41.8
9.0
3.9
doing so is small.
Assam
2.7
Nil
0.7
2.1
One of the major criticisms of IRDP is
Bihar
48.0
10.0
20.0
12.8
that the programme is benefiting the house
1.7
Gujarat
28.6
13.3
3.5
holds closer to the poverty line income
Haryana
Nil
0.7
0.6
2.5
threshold, and the ultra poor are unable to
21.7
Karnataka
13.4
4.6
5.8
take advantage of the scheme. It is suggested
15,0
Kerala
26.7
3.0
4.0
that the poorest households may not be able
31.4
27.1
8.5
Madhya Pradesh
8.4
to hold and manage assets. Recent evidence,
Maharashtra
25.9
26.2
7.5
6.9
however, effectively refutes this criticism. In
Orissa
18.3
25.7
5.4
4.9
fact, in an administratively weak and rela
2.9
Punjab
Nil
0.5
0.8
tively poorer state like Uttar Pradesh, it has
Rajasthan
22.7
24.2
6.0
32
been found, based on panel data for 4 years,
44.2
Tamil Nadu
44.1
8.2
11.8
that the poorest households not only manag
Uttar Pradesh
18.3
81.3
3.1
21.6
ed to hold on to assets, but also found to
12.7
West Bengal
11.8
3.0
3.1
be deriving income from the assets on a sus
All India
379.6
100.0
20.65
100,00
tained basis [C H H Rao and Rangaswamy;
Source: Ministry of Programme Implementation Progress Reports.
and Pulley). The problem encountered by
A-12
Economic and Political Weekly
March 31, 1990
credit for the very poor.
The overall assessment of the two employ
ment programmes (NREP and RLEGP) is
similar. Together these programmes provid
ed, on average, about 450 million mandays
of employment per annum. Here again,
evaluations pointed out that: (a) the impact
of the programmes on the total income of
poor households was insignificant because
they met only about 9 per cent of the de
mand for work from the poor in rural areas;
(b) the programmes could not create suffi
ciently useful, wage-imensiv works at times
and in places most needea, (c) the poor
could not benefit from the assets created;
(d) the assets created were of poor quality;
and (e) wages actually paid were lower than
budgeted owing to leakages and corruption.
it must be stressed that some of these
criticisms are misplaced. For example, the
size of the programme (NREP) is not small,
when compared to incremental employment
generated in the rural areas. One recent
estimate [Subbarao, 1987a] suggests that
NREP provided nearly 40 per cent of the
total incremental employment in rural India.
There is, however, no doubt that MEGS,
a state-level programme, has a much better
record, both in generating supplementary
employment especially for women, and also
Tamil Nadu—have been successful in attrac
ting women in large numbers to NREP work
sites (sec Table 20). The state with a large
proportion of the ultra poor—Uttar
Pradesh—has a dismal record in the employ
ment of women in NREP projects. However.
the state-wise distribution of mandays of
employment generated docs appear to be in
in terms of much belter administered wage
structure that reduced gender differences in
wage rates. Nonetheless, recent moves to pay
statutorily fixed minimum wages may
destroy some of the merits of this scheme
[Subbarao, 1987a] such as its self- targeting
character.
Only two stales—Andhra Pradesh and
Table 22: Per Capita Public Expenditure (Revenue)’ on Hlai m in States
Per Capita
Expenditure at
1980-81 Prices
1976-77 1986-87
Andhra Pradesh
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
18.1
8.7
20.2
20.4
20.0
24.8
17.6
20.3
15 7
24.1
21.4
22.9
10.0
22.0
30.4
15.0
39.6
37.5
23.2
29.3
18.3
44.7
32.2
32.8
32.8
33.3
19.1
25.4
Rate of
Growth
5.3
5.6
7.0
6.3
1.5
1.7
0.4
8.2
7.4
3.1
44
3.8
6.7
1.4
Life
Expectancy
Infant
Mortality
1976
1986
1976
1985
47.9
42.3
50.2
52.9
54.5
61.7
46.9
53.5
44.0
58.4
49.3
50.3'
42.8
49.6
53.1
46.0
52.4
54.8
56.3
65.5
49.0
56.3
49.1
60.5
51.9
53.4
46.2
52.0
122
NA
146
112
89
56
138
83
127
108
142
110
178
NA
83
105
98
85
71
32
122
68
130
71
108
80
140
77
Source: RBI Bulletins, Various Issues.
a Includes expenditure on family welfare and water supply.
Table 2k Regionai Prohi e oi Mai nutrition among Children (Percentage of Severely Malnourished Children (Grades III and IV)
in ICDS Project Areas during 1984-853
SI
No
State
1 Andhra Pradesh
2 Karnataka
3 Tamil Nadu
4 Kerala
5 Madhya Pradesh
6 Uttar Pradesh
7 Rajasthan
8 Maharashtra
9 Gujarat
10 Orissa
11 West Bengal
12 Haryana
Type of
Projectb
District
Guntur
Vizianagaram
Dharwar
Mysore
Kanyakumari
Salem
Mallapuram
Palghat
Jabalpur
Dhar
Pratapgarh
Kheri
Bharatpur
Banswara
Yaystmal
Nanded
Valsad
Baroda
Cuttack
Nadia
Bankura
Hissar
Bhiwani
Rural
Tribal
Rural
Rural
Urban
Urban
Rural
Rural
Rural
Tribal
Rural
Rural
Rural
Tribal
Rural
Urban
Tribal
Tribal
Rural
Rural
Tribal
Rural
Rural
Per Cent Malnourished Child Mortality Ratec
District Characteristics
0-3
3-6
0-2
SC + STU
AVA
0-5
IRR'
POPC
(2)
(6)
(3)
(5)
(7)
(I)
(4)
8.80
22.20
15.40
17.20
5.70
5.70
1.20
0.70
34.40
26.00
14.60
6.10
12.40
14.20
22.30
12.00
4.60
7.30
3.20
21.30
6.50
6.70
5.50
11.30
32.50
12.90
10.80
4.60
0.30
4.30
4.00
16.90
17.30
13.00
3.10
na
0.70
25.10
10.20
3.30
5.60
2.80
12.20
8.20
4.20
0.70
99
169
124
109
70
74
66
74
220
138
163
154
214
170
177
87
91
115
196
115
77
120
114
142.00
196.00
182.00
149.00
80.00
101.00
104.00
116.00
265.00
174.00
211.00
187.00
252.00
169.00
227.00
107.00
’ 96.00
129.00
204.00
149.00
89.00
146.00
129.00
13.00
19.00
15.00
24.00
5.00
20.00
9.00
19.00
29.00
59.00
22.00
27.00
24.00
25.00
26.00
21.00
57.00
31.00
21.00
28.00
40.00
22.00
18.00
317.00
61.00
307.00
270.00
161.00
245.00
355.00
421.00
152.00
350.00
222.00
587.00
369.00
235.00
264.00
289.00
192.00
206.00
271.00
268.00
427.00
901.00
558.00
39.00
30.00
6.00
17.00
52.00
22.00
57.00
57.00
5.00
7.00
28.00
10.00
20.00
7.00
2.00
3.00
13.00
21.00
32.00
33.00
33.00
64.00
20.00
Notes: a = The data in columns 1 and 2 are taken from ICDS Project-wise Progress Report for 1984-85, for those projects which were
sanctioned during 1983-84. As such, these figures reflect the nutrition situation at/about the commencement of ICDS in these
districts.
b = rural; T = tribal; U = urban. *
c = District-wise child mortality rates for 1981 for the age groups less than 2 and less than 5 years were made available for the
first time in the Occasional Paper 5, 1988, Office of Registrar-General, Ministry for Income Affairs.
d = Per cent SC/ST to total population.
e = Agricultural value-added.
f = Irrigation ratio.
Economic and Political Weekly
March 31, 1990
A-13
conformity with the distribution of ultra
poor. It would be interesting to see whether
the state-wise distribution of mandays of
employment generated is correlated with the
distribution of the ultra poor. We estimated
this correlation which was found to be 0.78
statistically significant. However, there are
some outliers. For example in Bihar and
West Bengal, employment generated was
substantially lower than the share of the
ultra poor.
Most evaluations of employment have ex
pressed concern that states have opted for
rural roads, primary school building con
struction. etc, in preference to directly pro
ductive activities such as soil conservation
and watershed development. Recent work by
Binswanger, ci al 11989) points to the signifi
cant positive impact of rural infrastructure
(markets and roads) on agricultural output.
Therefore, there appears to be no strong
argument for discouraging rural infrastruc
ture building on grounds that they arc "not
directly productive”. The most immediate
concern ought to be ensuring quality ol
works and maintenance of infrastructure
created.
Despite the deficiencies noted in employ
ment programmes, these schemes appear to
have certain desirable features, such as a
certain amount of self-targeting (through
relative unattractiveness of this employment)
and that the guarantee schemes can in a
sense substitute for a social security system,
at least for those who are able to work. If
attempts are made to remove the observed
deficiencies and women are attracted to
work sites as in MEGS, these programmes
do have the potential :o reach the bottom
half of the population within the poverty
group.
(B)
Nutrition. Health, and Other
Social Sector Interventions
The basic objective of direct nutrition in
terventions is to protect specific vulnerable
groups, such as children and women, from
malnutrition. Food, being the basic need,
direct intervention to increase food security
for the poor may have good pay-off in terms
of human welfare. An important nationwide
programme is Integrated Child Development
Services (ICDS) launched in 1975, whose
aim is to provide a package of services such
as child protection and development with
stress on both pre-natal services including
immunisation, periodical health check up,
and referral services. Growth monitoring
and supplementary nutrition for 300 days
of the year for all children are the other com
ponents of the scheme. About 6.5 million
children below. 6 years of age and 1.5 million
women were covered under ICDS during
1985-86.
The survey data of the National Nutrition
Monitoring Bureau (NNME) do show steady
but slow decrease in severe malnutrition dur
ing 1974-81 in 10 states [Subbarao, 1989].
There has been no NNMB survey since 1981.
ICDS baseline data are useful in assessing
the recent geographical patterns of malnutri
A-14
tion. These arc shown in Table 21 In order
to lest that reliability of the number of the
percentage of severely malnourished children
collected by ICDS authorities, we estimated
the correlation between these and the child
mortality rates for the corresponding 23
districts. A statistically significant positive
correlation between the two scries suggests
that the ICDS baseline data can be relied
upon for assessing geographical variations
in malnutrition at a fairly disaggregated
lend.
What can we infer from these data? The
percentage of children severely malnourished
are indeed very high in tribal Andhra
Pradesh, Bihar, Rajasthan and Madhya
Pradesh and also in rural Karnataka,
Madhya Pradesh, Uttar Pradesh, Maha
rashtra and West Bengal. Considering that
these states account for a significant propor
tion of the nation’s ultra poor, and bearing
in mind the concentration of poverty among
the scheduled castes and tribes, povertyinduced malnutrition continues to be ram
pant in pockets of India.
As with other interventions, evaluations
of ICDS have pointed out many shortcom.ngs (Subbarao, 1989). Immunisation levels
continued to be low and there was a drop
from the first to the second dose in many
cases, the regularity of feeding differed from
centre to centre, and there was little com
munity participation. The programme, like
most other interventions, has been relatively
more successful in reaching the poor and
poorer groups, but not the poorest. There
are significant inter-project variations in
impact (Heaver), with relatively poorer
states/regions faring worse than others ow
ing especially to the inability of poor states
to put in their share of expenditure on nutri
tion supplements. Regions with low infra
structural levels also could not do well
(Subbarao, 1989]. ICDS is very promising
and could become a good complement to
other poverty alleviation programmes pro
vided children of the poorest groups are at
tracted to the scheme, if necessary, by
appropriate incentives such as provision of
clothes to children. However, • India’s ex
perience suggests the need for great caution
in exercising choice among competing alter
native strategies for filling nutrition needs
of the poor. For example, in Tamil Nadu,
which has a long experience in nutrition
management, a package of nutrition and
health services to children of 6 to 36 months
old is being delivered under the Tamil Nadu
Integrated Nutrition Project. This project
was able to elicit community participation
to a far greater extent than ICDS. Impor
tant non-economic factors contributed to its
success such as recruitment of nutrition
workers from among the deprived commu
nities in which malnutrition was most severe
(Subbarao, 1989).
Health
Access to primary health care has a direct
effect on the well-being of the poor in rural
India. There is ample empirical evidence to
suggest that India is much behind other
countries with comparable per capita in
comes in South Asia with respect to social
I'-xin i 23- Urbxn am) Ri-rai I.ni ra< v Rates. bv Agf and Sex. 1981
Age Groups
Location' Sex
10-15
15-35
35 and Over
All Ages
(a) Literacy rates
Urban
Male
Female
Both
Rural
Male
Female
Both
Total
Male
Female
Both
82.6
72.7
78.1
81.5
63.6
73.1
69.4
35.9
54.3
65.8
47.8
57.4
62.8
36.0
50.2
56.1
25.7
41.5
38.0
8.6
23.2
40.8
18.0
29.7
67.2
44.4
56.5
63.9
35.3
50.0
44.6
14.4
30.2
46.9
24.8
36.2
(b) Percentage rise, 1971-81
Urban
Male
Female
Both
Rural
Male
Female
Both
Total
Male
Female
Both
•1.8
3.7
2.9
4.1
13.8
7.3
7.6
18.9
10.1
7.5
13.5
9.5
14.0
20.8
16.?
15.0
41.2
24.1
21.8
32.3
19.6
20.7
37.4
25.3
11.4
17.5
13.7
14.1
35.2
21.1
18.0
33.3
19.8
18.7
32.6
22.7
Source: Census of India, 1981, Paper 2 (1983], as quoted in R M Sundaram (1987).
Economic and Political Weekly
March 31, 1990
Table 24: Literacy Rates. 1981
Segment
Total
Popu
lation
Sche
duled
Castes
Sche
duled
Tribes
Total
Male
Female
Rural
Male
Female
Urban
Male
Female
36.23
46.89
24.82
29.65
40.79
17.96
57.40
65.83
47.82
21.38
31.12
10.93
18.48
27.91
8.45
36.60
47.54
24.34
16.35
24.52
8.04
14.92
22.94
6.81
37.93
47.60
27.32
tality rate, however, is weakly related to
expenditure and not at all to its growth rate.
Clearly, policies such as immunisation and
nutrition interventions are more relevant in
this context than aggregate expenditures.
(C)
education
India is now facing in education is to ensure
that girls and children of poverty groups
(e g, scheduled castes and tribes) are not
merely enrolled but retained in school after
enrolment. Given the resource crunch, a
major question is one of reconciling affor
dability with cost recovery—a problem com
mon to all social sectors. Charging the poor
full cost will certainly put the services
beyond the reach of the poor. On the other
hand, fully subsidising the services would
place such a burden on public budget as to
affect growth programmes. At present, cross
subsidising between the more affluent and
the poor seems to offer a promising way out.
For example, Rs 6,243 million was spent on
higher and professional education during
1976-77. If 50 per cent of the cost were
recovered, there would have been a saving
of Rs 3,121 million, which, if diverted to
primary education (assuming no constraints
are on the demand side), could have provid
ed primary education to about 20 million
more children. If this were continued for five
years (1976-81), the country would have had
100 million additional literates, or a literacy
rate of 51.4 per cent instead of the realised
36.2
per cent in 1981.
Log (IMR 1986) = 6.2
- 0.64*
(0.3) Log (PEH 1976-77)
In the field of education, there has un
doubtedly been considerable progress in
terms of the growth of institutions. Yet
serious inequality in access to education per
sists by regions, social groups, and gender
[Subbarao, 1987b]. Basic data showing these
inequalities in access to education are given
in Tables 23, 24 and 25. Even on the average,
all-India literacy rate in 1981 stood at a low
level of 36.2. Drop out rates are high and
there is considerable wastage.
Despite a rise in government expenditure
on education as a per cent of GDP, the
quality, physical facilities, and geographical
coverage of schools are poor especially in
rural areas. Even though social returns for
primary education are known to be higher,
government spending is based in favour of
higher education whose recipients are largely
the rich and the elite. Cost recovery is poor
at higher levels of education so that a
substantial chunk of subsidy goes to the
non-poor.
While the above remarks give the general
status of education in India, there are signifi
cant regional variations as in other spheres
of development. State-wise expenditures and
literacy rates are shown in Table 22. Unlike
in the case of health, literacy rates and
educational expenditures are correlated:
Literacy Rate = 1.352 + 0.82’ Ed Exp,
R2 = 0.67
* Significant at the 5 per cent level.
Since educational outcomes are related to ex
penditures, it would be interesting to ex
amine whether states with unsatisfactory
performance are spending adequately on
education. In order to do this we first com
puted the ratio of expenditure to per capita
income for each state. We then ordered the
states in terms of the distance of each states
from the best in India. A relationship bet
ween the two series was estimated in order.
to know whether states are spending ade
quately, in relation to their perceived needs.
This equation of literacy on effort yielded
no statistically significant relationship, clear
ly confirming the underfunding on educa
tion in many states.
By far the most challenging problem that
+ 2.4 Log (1 + r)
(3.8)
R2 = 0.39
• Statistically significant
where
Period
For all
Communities
For Scheduled
Castes
For Scheduled
Tribes
For Other
Communities
1968-72
1969-73
1970-74
1971-75
1972-76
1973-77
1974-78
33.5
35.0
36.2
36.8
37.2
36.9
38.6
27.8
28.8
30.3
31.4
32.2
33.5
35.6
20.3
21.3
22.9
22.3
21.9
20.5
23.3
35.3
36.9
38.0
38.6
39.1
38.8
40.5
Source: Census of India, 1981, Primary
census
abstract.
indicators reflecting the status of health care.
There arc significant regional variations in
public efforts (as revealed by expenditures)
and outcomes (as shown by infant mortality,
life expectancy’, etc). These are shown in
Table 22.
In absolute terms, per capita expenditures
are very low in the three states with the
highest concentration of poverty—Uttar
Pradesh, Bihar and Madhya Pradesh. These
are also the states with the lowest life expec
tancy and highest infant mortality rates.
However, there appears to be no systematic
relationship between health expenditures and
outcomes. Even the rank relationship bet
ween the input and output variables is not
high. This is largely because life expectancy
and infant mortality are a function of rela
tive priority accorded to primary health care,
and numerous other factors such as pro
tected water, female education, immunisa
tion, etc. Detailed break-up of health
expenditures is not available state-wise.
Assuming that the relative share of
various segments of health expenditure re
mained unchanged (which is by and large
the case in most states), life expectancy and
infant mortality in 1986 may be expected to
be a function of initial expenditure levels in
1976, and the rate of growth of expenditure
over the period 1976-86. The estimated equa
tions are as follows:
Log (LE 1986) = 3.3 +
0.25*
(0.061)
8 <PEH 1976-77)
- 0.066* Log (1 + r)
(0.78)
r2 = o.63
LE = Life expectancy.
PEH = Level of per capita expenditure on
health (in different states).
IMR = Infant mortality rate.
The relationship between levels of expen
ditures on health and life expectancy is in
the expected direction, although the rate of
growth of expenditures is non-significant.
The elasticity of life expectancy to expen
diture was in the range 0.13-0.37. Infant mor
Economic and Political Weekly
VIII
Concluding Remarks
An important conclusion of this study is
that the beneficial.effects of growth on the
incidence of poverty can be nullified by
adverse movements in the inequality of con
sumption. Indeed, whether analysed at the
state-level or all-India level, this has been the
case during 1973-77 when' high growth in
average consumption per capita was accom
panied by a sharp rise in consumption in
equality, thereby considerably reducing the
total impact on the reduction of poverty in
cidence. To this extent, the policy response
in the form of a scries of anti-poverty inter
ventions since the mid-1970s aimed at raising
the income/consumption levels of the poor
and the ultra poor was basically a sound
policy response.
During the period 1977-83, average con
sumption grew slowly, but consumption in
equality fell in many states, and the
reduction in the incidence of poverty was
greater in magnitude than in the earlier
period of high growth. Our separate analysis
for the ‘poor’ and ‘ultra poor’ suggests that
the beneficial impact of a reduction in ine
quality is more pronounced for the ultra
Table 25: Retention Rates (Class I-V)
Source. Ministry of Education, New Delhi.
March 31, 1990
poor than for the poor; by the same token
a worsening of inequality hurts the ultra
poor proportionately more than the poor.
While it is difficult to identify precisely the
factors that may have contributed to the
decline in inequality in many states during
1977-83, the role of direct interventions can
not be minimised.
An interesting temporal tendency worth
noting is that the poverty ratio has become
more responsive to the changes in mean in
come and income inequality in all states ex
cept Bihar and West Bengal. Moreover, the
numerical magnitudes of the relevant elasti
cities are higher for the richer states. Also,
both growth and inequality elasticities are
higher for the ultra poor than for the poor.
These results show that it would seem desira
ble to pursue inequality-reducing policies in
both rich and poor states to compound the
beneficial impact of growth especially on the
ultra poor.
These results lend significant credibility
to the consumption-equalising interventions
initiated since the mid-1970s. There is no
doubt that at present there is significant
inter-state variation in the effectiveness of
these interventions which in genera! need to
be improved. However, the divergence in the
performance of programmes such as IRDP
between the macro and micro level has been
narrowing, and our review of micro evidence
suggests substantial benefits even in a poor
state such as Uttar Pradesh. While this is
consistent with our earlier finding of
substantial reduction of consumption in
equality in this period, programme effec
tiveness is clearly weak in the poorer states.
Employment programmes contributed subs
tantially to incremental employment/incomc
growth, and their state-wise distribution by
and large corresponded with the distribution
of the ultra poor, although poorer states
(Bihar and West Bengal) deserved greater
efforts.
Finally, our analysis of social sector (in
cluding nutrition) investments and perfor
mance suggests under-investment when
efforts are analysed in relation to perceived
needs and the capacity of the states. On the
whole, the general record on health, educa
tion and nutrition fronts is most unim
pressive. One is left with the impression that
the social policies which can raise the longrun capabilities of the people have generally
been relegated to the background in Indian
policy-making.
Notes
[For comments on an earlier draft, the authors
wish to thank Pranab Bardhan, Michael Lipton
and I J Singh. The views expressed are the per
sonal views of the authors. We would like to
express our gratitude to Maria Felix for pro
viding excellent secretarial assistance.!
For a detailed discussion of this issue see
Kakwani [1986].
2 Two consecutive years, 1972-73 and 1973-.74,
were selected with a purpose. As is wellknown, 1972-73 was a bad crop year, and
I
A-16
1973-74 was a norma) year. Food production
in the first year was lower (han in the second
year by 8 per cent. We thought these two year
data would provide a good opportunity for
studying the short-run impact of crop out
put fluctuation on poverty and inequality
across the states.
January 2 and 9.
Fields, G S (1989), ‘Changes in Poverty and In
equality in Developing Countries’, mimeo,
Cornell University.
Foster, J, J Greer and E Thorbecke (1984), A
Class of Decomposable Poverty Measures’,
Economct rica, Vol 52, pp 761-766.
3
See for instance Kakwani [1980], Clark, Gaiha, R (1989), ‘Poverty Alleviation Program
mes in Rural India: An Assessment’, un
Hemming and Ulph [1981], Foster, Greer and
published paper.
Thorbecke [1984] and Takayama [1979].
4 It is worth repealing that this procedure, Hanson, J and S Sengupta (1989), ‘India’s
Manufacturing Sector and Employment
unlike the procedures adopted by many
Creation;.A Comparison of the 1970s and
previous researchers, appropriately takes ac
1980s’, mimeo. World Bank, Asia Country
count of the regional price variations while
Department.
deriving poverty at the all-1 ndia level.
5
It is worth stressing that this finding con Kakwani, N (1980), Income Inequality and
Poverty: Methods of Estimation and Policy
tradicts the results based on cross-country
Applications, New York: Oxford University
comparisons by Fields.
Press.
6 Kakwani [1989] has provided the explicit ex
pressions of (his elasticity for all the additive — (1986), Analysing Redistribution Policies: A
Study Using Australian Data, New York:
ly decomposable poverty measures.
Cambridge University Press.
7 See Kakwani [1989].
8 To illustrate, consider a state which assisted — (1989), ‘Poverty and Economic Growth:
With Application to Cote d' I voire’, mimeo,
households close to the poverty line and
Welfare and Human Resources Division,
helped them all cross the line, with another
The World Bank
state that selected households way below the
Lipton, M (1988), ‘Poverty: Concepts,
poverty line (i e, the ultra poor), and helped
Thresholds and Equity Concepts’, Interna
their incomes grow, but not sufficiently
tional Food Policy Research Institute,
enough to cross the poverty line. Previous
mimeo.
IRDP evaluations hailed the former state and
condemned the latter, following the criterion
Minhas. B S (1970), 'Rural Poverty, Land
of “crossing the poverty line”. Gaiha’s [1989]
Distribution and Development', Indian
critique misses this important consideration
Economic Review.
in the assessment of programme effec
Minhas, B S, L R Jain, S M Kansal and M R
tiveness.
Saluja (1987), 'On the Choice of Appro
priate Consumer Price Indices and Data
Sets for Estimating the Incidence of Poverty
References
in India’, Indian Economic Review, Vol 12,
pp 19-49.
Ahluwalia, M S [1978], ‘Rural Poverty and
/Xgricultural Performance in India’, Jour Planning Commission, Government of India
(1979), Sixth Five Year Plan.
nal of Development Studies, Vol 14(3),
Puley, V (1989), ‘Making the Poor Creditwor
pp 298-323.
thy’, World Bank Discussion Paper No 58.
Bardhan, P K (1970), ‘On the Minimum Level
Rao, C FI H, S K Ray and K Subbarao (1988),
of Living and the Rural Poor’, Indian
Unstable Agriculture and Droughts: Im
Economic Review, Vol 5, pp 129- 136.
plications for Policy, Vikas, Delhi.
— (1973), ‘On the Incidence of Poverty in Rural
Rao,
C FI FI and P Rangaswamy (1988), ‘Effi
India in the Sixties’, Economic and Political
ciency of Investments in IRDP: A Study of
Weekly, Annual Number.
Uttar Pradesh’, Economic and Political
— (1974), ‘Poverty and Income Distribution in
Weekly, June 25.
India: A Review’ in Bardhan, P K and T
N Srinivasan (eds), Poverty and Income Subbarao, K (1985), ‘Regional Variations in Im
pact of Anti-Poverty Programmes’,
Distribution in India, Statistical Publshing
Economic and Political Weekly, October 26.
Society, Calcutta, pp 264-280.
Bhalla, S (1987), ‘Trends in Employment in — (1987a), ‘Interventions to Fill Nutrition Gaps
at the Household Level: A Review of India’s
Indian Agriculture, Land and Asset
Experience’, Paper presented at a Workshop
Distribution’,. Indian Journal of
on Poverty in India: Research and Policy,
Agricultural Economics, Vol 42(4),
Queen Elizabeth House, Oxford University.
to 537-560.
Bhattacharya, N and G S Chatterjee (1974), ‘On — (1987b), ‘Some Aspects of Access to Educa
tion in India’, mimeo, The World Bank,
Disparities in Per Capita Household Con
New Delhi Resident Mission.
sumption in India’ in Bardhan, P K and
— (1989), Improving Nutrition in India: ProT N Srinivasan (1974), op cit.
grammestmd
Policies and their Impact, The
Binswanger, H P, Khandker, S R, and M R
World Bank, Discussion Paper No 49.
Rosenzweig (1989), ‘How Infrastructure and
Financial Institutions Affect Agricultural Sundaram, R M (198’5), Growth and Income
Distribution in India, Sage, Delhi.
Output and Investment in India', World
Bank, Policy Planning and Research Work Thkayama, N (1979), ‘Poverty, Income Inequali
ty and Their Measures: Professor Sen’s Ax
ing Paper No 163.
iomatic
Approach
Reconsidered’,
Clark, S, R Hemming and Davig Ulph (1981),
Econometrica, Vol 47, May, pp 747-760.
‘On Indices for the Measurement of Pover
Theil,
H
(1967),
Economics
and
Information
ty’, The Economic Journal, Vol 91,
Theory, Studies in Mathematical and
pp 515-526.
Managerial Economics, Vol 7, NorthDandekar, V M and N Rath (1971), ‘Poverty in
Holland, Amsterdam.
India’ Economic and Political Weekly,
Economic and Political Weekly
March 31, 1990
Co>n h - 7 0-2-3
SPECIAL ARTICLES
Integrating Poverty Alleviation Programmes
with Development Strategies
Indian Experience
(’ H Hanuniantha Kao
This paper examines the potential and prospects for integrating the major Poverty Alleviation Programmes
(PAPs) in rural areas with overall development. The potential for such integration, it is suggested, is quite high,
both by way of better choice of activities and more effective implementation of (he activities chosen, the latter
being far more important than the former. Devising appropriate institutional mechanisms for planning the activities
under PAPs within the framework of area development planning and, more particularly, for their effective
implementation constitutes the biggest challenge in the drive for eradication of rural poverty.
•
•
THE question of integration of the poverty
alleviation objective with the overall development strategy has to be distinguished from
the issue of integrating PAPs with the overall
development strategy. The former is con
cerned basically with questions like invest
ment priorities (e g, the relative importance
to be given to the wage-goods sector,
e g, agriculture), choice of techniques (with
implications for the magnitude of employ
ment generation) and location of projects
(in low wage or less developed areas versus
developed areas), etc, so that the normal
growth process leads to adequate employ
ment and income generation for the poor
in an environment of food security. In brief,
this approach seeks to maximise the ‘trickle
down’ or ‘percolation’ effects for the poor
from the growih process consistent with
economic efficiency. The latter approach,
i e, integration of PAPs with overall develop
ment strategy seeks to ensure that the
existing or modified PAPs, as they operate,
subserve the goals of overall development
such as the sustained increase in GNP
through the increase in the productivity of
resources, augmenting the employment
generating potential in the economic system,
conservation of environment, technological
upgradation, human development, etc.
These two approaches are not mutually
contradictory but reinforce each other. In
fact, the failure to integrate the poverty
alleviation objective with the overall develop
ment strategy has necessitated the launching
of specific PAPs under the strategy of ‘direct
attack’ on poverty. The proliferation of
PAPs, on the other hand, without adequate
integration with the overall goals of develop
ment, has led to the inefficient use of the
large chunk of resources allocated to PAPs
on account of weak linkages with growth,
low potential for sustained employment
generation and insufficient impact on social
development and protection of environment.
This trend, if unchecked, can undermine the
objectives of economic growth as well as
poverty alleviation. The first issue, still a live
one, is extremely important, but the present
Economic and Political Weekly
paper is basically concerned with the latter
issue of integrating the PAPs with the overall
development strategics.
‘Dichotomy1 between agricultural
Growth and Rural Poverty
Alleviation
The link between agricultural develop
ment and poverty alleviation was clearly visi
ble in the first few years of planning in India
when land reform and irrigation develop
ment were given a pre-eminent place. With
the introduction of new technology in the
mid-60s, increasing yield per hectare of crop
ped area rather than increasing cropping
intensity became the central concern and the
locus of agricultural growth shifted to the
developed regions and the prosperous
farmers. Although there is some reversal of
this trend in the 80s, the employment
elasticity in agriculture for the country as
a whole has declined significantly, the
elasticity becoming negative in the tradi
tional green revolution belt
The failure of agricultural growth to make
a sizeable dent on rural poverty has led
policy-makers to focus attention on the
strategy of ‘direct attack’ on poverty through
PAPs. In this process, the tendency to view
agricultural development programmes as dif
ferent from those for poverty alleviation and
vice versa has become quite pronounced.
Those concerned with raising agricultural
productivity are preoccupied exclusively with
technologies and input combinations to raise
yield per hectare and with the ‘progressive
farmers’ and developed regions where the
results are quick and substantial. They are
not as much concerned with small farmers
or with extending technologies and practices
which increase employment in areas where
poverty is widespread. On the other hand,
in the pursuit of poverty alleviation pro
grammes such as Integrated Rural Develop
ment Programme (IRDP) and Jawahar
Rozgar Yojana(JRY), etc, one does not find
adequate concern for undertaking activities
like soil conservation, water harvesting.
November 28. 1992
drainage and construction of field channels
which raise agricultural productivity. In fact,
in the field one often finds each department
considering the other as a rival competing
for staff and other resources. This approach
is detrimental to raising agricultural produc
tivity as w'cll as to alleviating rural poverty
on a sustained basis.
PAPs: Overview of Experience
Agriculture in India continues to be a
decentralised activity where millions of in
dividual farmers take decisions, in a free
institutional setting, regarding investment,
crops to be grown, input-mix to be used, and
the amount of produce to be sold, etc, within
the infrastructural and policy environment
provided by the government. Because of this,
the allocation of resources by the farmers
has, by and large, been efficient even though
the direct impact of this on poverty allevia
tion has not been significant. Indeed, there
are certain negative effects on environment
owing to the adverse externalities arising
from this decision-making process, such as
those associated with the extension of
cultivation to the hill slopes and marginal
lands.
In contrast to the decision-making pro
cess in agriculture, PAPs represent essentially
top-down ventures heavily dependent on the
bureaucracy. As a consequence, the felt
needs of the people do not get sufficient at
tention and the activities cKosCTTTfi^very
often ill-suited to the local resource endpwments in the absence of market institutions and owing to the infirmities in the
working of the non-market institutions, like
the government departments and represen
tative local institutions, together with the
extreme reluctance to involve NGQs iq the
designing and implementation of PAPs,7a
number of int<nmediaries_are found to
operate in a clandestine manner between the
government and the beneficiaries. This has
resulted in large leakages' an'd^inefficiencies
in1!he implementation of PAPs.
Despite these inefficiencies, the contribu-
2603
iior^Q.£J2ABs-La.Lbc_obsened reduction in
rural poverty has been significant. In regions
where agricultural growth is slow and
poverty is widespread, the various PAPs ac
count for more than half the incremental in
comes of the rural poor in the recent period
[Rao. Ray and Subbarao 1988].
Over a period of time, there has been a
significant shift in the composition of self
employment activities under IRDP away
from the primary sector activities such as
animal husbandry towards secondary and
tertiary sector activities where the capital
output ratios are generally lower and the
leakages are much smaller. Moreover, con
trary to the fears expressed regarding the
economic viability of the poorer household
enterprises [Rath 1985], the concurrent
evaluation studies show that the lower
income households have been able to achieve
belter results than upper income households,
both in terms of lower capital-output ratios
and smaller leakages [Rao and Rangaswamy
1988]. The performance of IRDP was found
to be distinctly better in the infrastructurally
developed regions where the awareness levels
and bargaining power of the beneficiaries
are also higher [Subbarao 1985].
However, the self-employment activities
are weakly integrated with area development
planning resulting in lack of flexibility both
in the selection of activities suiting local
resource endowments and in devising
methods for implementation. Wage
employment programmes are also insuffi
ciently integrated with plans for area
development. The assets created are mostly
of the type which do not have a potential
for sustained increase in employment over
a period of time. Further, the upper income
\ groups in the rural areas seem to have been
I the major beneficiaries from the assets
^•created, whereas the assets created exclusive
ly for the benefit of the poor such as hous
ing and irrigation for marginal farmers, etc,
are relatively few [Hirway et al 1991].
POTENTIAL FOR INTEGRATION OF PAPs
with Overall Development
Strategies
The integration of PAPs with agricultural
development can be made effective by
strengthening the land-base for the poor,
particularly women among them, through
the effective implementation of the existing
legislation on land reform. Since there is an
active land market in the countryside where
farmers having access to resources are able
to augment their landholdings, it would be
desirable to advance long-term loans on
liberal terms to the landless poor for the pur
chase of land. The recent decision of the
government of India to permit Ioans for pur
chase of land under IRDP is a step in the
right direction.
The existing policy of containing popula
tion growth is not strictly a poverty allevia
tion programme but unless it is integrated
with income generating programmes and
social development for the poor, it would be
2604
difficult to motivate them to limit the size
of their families. The official policy.has so
far treated population growth essentially as,
exogencous toJ he developmental, process.
However, the experience over tliFpIarrperiod
in different parts of the country has shown
that the decline in fertility levels is very much
influenced by the levels of social and
economic development such as age at mar
riage of girls, infant mortality rate, literacy
levels (particularly for females), and income
levels, etc.
Given the appropriate land and popula
tion policies, there are three major poten
tial areas for integration of PAPs with overall
development strategy. They arc: (i) stepping
up existing wage-employment programmes
in rural areas for capital construction in
agriculture and for eco-development;
(ii) stimulating the growth of household and
small-scale rural industries by integrating
them with the existing self-employment pro
grammes like IRDP; and (iii) acceleration in
the pace of social development in rural areas.
The rest of this paper is devoted to the
examination of various programmes in these
three areas from the point of view of their
integration with overall development.
Wage-Employment Programmes
J RY, a major wage-employment pro
gramme, was launched in the last year of the
Seventh Plan by merging the two ongoing
wage-employment programmes, viz,
National Rural Employment Programme
(NREP) and Rural Landless Employment
Guarantee Programme (RLEGP). JRY is
expected to generate nearly 1,000 million
mandays of employment per annum, the
centre’s contribution to the expenditure
being 80 per cent and the states’ share 20
per cent. Unlike the previous programmes
which could not cover a large number of
villages, the JRY is being implemented in all
the villages in the country.
Central assistance to the states for JRY
is distributed in proportion to the rural poor
of each state to the total number of rural
poor in the country. Out of this allocation
for each state, 28 per cent is earmarked for
■various schemes at the state level (20 per cent
earmarked for Million Well Scheme (MWS)
for poor SC/ST farmers, 6 per cent for hous
ing under the Indira Awaas Yojana (IAY)
and 2 per cent as administrative costs). The
remaining 72 per cent is allocated to districts
on the basis of an index of backwardness
with 20 per cent weightage for the propor
tion of agricultural labourers in total rural
workers, 60 per cent weightage to the pro
portion of rural SC and ST population in
relation to the total rural population and 20
per cent weightage to increase of agricultural
productivity. Out of the district-level alloca
tions, 20 per cent is retained at the district
level and 80 per cent is allocated to the
village panchayals by giving 60 per cent
weightage to SC/ST population and 40 per
cent to the total population of the village
panchayat. There is no sectoral earmarking
of resources at the village panchayat level.
except that 15 per cent of annual allocation
must be spent on works directly beneficial
to SCs/STs. Also, there is 30 per cent reser
vation for women in employment generated.
The above pattern of allocation docs not
appear to impose any major constraints on
the integration of this wage-employment
programme into overall development of the
area. Funds are allocated broadly according
to the social and economic backwardness of
the area or roughly in proportion to the
needs for infrastructure development,
physical as well as social. Districts and gram
panchayats are free to pool resources to take
up works for the common benefit. However,
the allocations are spread thinly as, accor
ding to a quick evaluation made by the Plan
ning Commission, only about 15 days of
wage-employment per person could be
generated in 1990-91 [Government of India,
1992]. Thus the intensive development of the
most backward areas or raising significant
ly the incomes of the poorest is not possi
ble with this pattern of allocation. Besides,
there is no provision for diverting even part
of the outlays meant for self-employment
programmes like IRDP towards wage
employment or vice-versa. This significant
ly limits the possibilities for integration of
PAPs with overall development. This is
because, according to the available studies,
self-employment programmes like IRDP
have usually proved to be more productive
and better integrated with overall develop
ment in regions which are infrastructurally
developed. On the other hand, less developed
regions are in greater need of labourintensive works for infrastructure develop
ment. Despite this limitation, it is important
to recognise that even under the existing pat
tern of allocation, there is significant scope
for integrating PAPs with overall develop
ment and this potential has not been fully
exploited so far.
The Eighth Five-Year Plan recognises that
“there is a need for integrating the various
anti-poverty programmes with the sectoral
programmes in a specified area so as to en
sure a'sustainable increase in employment
and income of the rural poor and the in
frastructural and environmental develop
ment of the area” [Eighth Five-Year Plan,
Vol II, p 37]. It says further that “a high
degree of convergence can be attempted in
a few districts on a pilot basis by an integra
tion of poverty alleviation programmes, the
area development programmes and sectoral
schemes” [ibid, p 38). It is, therefore, pro
posed in the Eighth Plan to select one district
per state for the implementation of the pro
gramme with an Integrated Rural Develop
ment Approach [ibid, p 38).
In the implementation of wage
employment programmes, priority is to be
given to activities which improve the land
resource base and the eco-system in rural
areas such as water-harvesting, desilting of
irrigation tanks, construction of field chan
nels, drainage, and measures for soil con
servation including afforestation. These are
Economic and Political Weekly
November 28, 1992
best undertaken in the framework of water
shed development in which mini or micro
watersheds are taken up for systematic treat
ment by using technologies that are area
specific, cost-effective, ecologically sound
and locally acceptable.
Wage-employment programmes are thus
easily amenable to integration with program
mes for area development such as the
National Watershed Development Project
for Rainfed Areas (NWDPRA) which has
been restructured to cover an area of about
3 million hectares in all the blocks of the
country where less than 30 per cent of arable
area is under assured irrigation, with 100 per
cent central assistance costing over Rs 1,100
crore during the Eighth Plan. The pro
gramme seeks to ensure sustainable produc
tion of biomass and restoration of ecological
balance through employment-oriented pro
duction systems like multiple cropping, agro
forestry, horticulture, etc. Besides this, a
centrally-sponsored scheme to associate
scheduled tribes and rural poor in afforesta
tion of degraded forests is also being pro
posed, with tribal people being entitled to
usufruct in full. The enormous potential for
integrating the employment objective with
eco-development is evident from the fact that
the reclamation of about 40 million hectares
of waste land for bio-mass production can
generate over 50 million person-years of
work.
According to the Eighth Plan, “priority
should be given to soil and water conserva
tion, waste land development and social
forestry followed by rural roads and rural
housing” [ibid, p 37]. However, “all-weather
roads need to be given priority, particularly
in tribal, hill and desert areas where in
accessibility to markets and to information
and inputs is a severe bottleneck” [ibid, p
36]. “This would be better achieved by a
greater integration of the existing special
employment programmes with other sectoral
development programmes, which in turn
would generate larger and more sustainable
employment” [ibid, p 36] However, since all
the employment demanded by the poor is
not likely to be available locally in every
region, some of the labour can be organised
under a Land Army Corporation with
its own technical staff. This can ensure ef
ficient execution of works through training
of workers and provision of amenities
[Government of India 1991].
It is necessary to integrate the nutritional
objective with employment generation goals.
Even a rise in employment and wages need
not necessarily result in improvement of
nutritional levels of the poor if the prices
of foodgrains rise simultaneously or they
become inaccessible. In view of this, in the
earlier wage-employment programmes it was
stipulated that part of the wage payment had
to be made in kind in terms of certain quan
tity of foodgrains. But under JRY this was
made optional with the result that the off
take of foodgrains under this programme
Economic and Political Weekly
came down drastically from 22 lakh tonnes
in 1986-87 to only about 1.36 lakh tonnes
in 1990-91. This reflects the reduced
availability of foodgrains for the programme
rather than the preferences of wage-labour.
In view of this experience, there are serious
moves now' for restoring the earlier practice
of paying part of the wages in terms of
foodgraim.
It is clea. from the findings of various
evaluation studies that the real bottle
neck in the way of integration of wage
employment programmes with overall
development is not so much the wrong
choice of activities as the ineffectiveness in
implementation of the activities chosen. The
choice of activities in the framework of area
planning as contemplated by Eighth Plan
may result in improved priorities and better
sequencing of activities but the problem of
the quality of execution would still remain.
Unlike agriculture, where farmers operate
basically within the framework of markets,
the poverty alleviation programmes are to
be implemented through non-market institu
tions, viz, government departments, elected
institutions at the local level and voluntary
or non-governmental organisations. The
existing policy dispenses with the contractor
system in the execution of wage-employment
projects under the PAPs because of low
generation of employment from the given
investment levels, as the contractors’ margins
are high and the material-wage ratio tends
to be high. Moreover, whereas the contractor
system may be efficient in the execution of
certain activities like construction of houses,
school buildings and roads, it is ill-suited to
undertaking activities like eco-development
involving peoples’ contribution and sequen
cing of various activities in an integrated
framework, requiring sustained interest by
the community in the supervision and
monitoring of activities over a long period
of time.
It is also wrong to assume that the mere
involvement of local-level elected institutions
in the planning and execution of program
mes can ensure better choice of activities and
more effective implementation. This is
because, except in a few states in the coun
try where land reforms have been successful
and other structural changes have been
significant, the elected institutions are
usually dominated by the rural elite, despite
reservation of seats for the weaker sections
of society. The priorities of the rural elite
are different from those of the rural poor.
At best, the choice would be in favour of ac
tivities like school buildings and roads and
community halls, the benefits from which
may accrue to all the sections of rural
population. At worst, the funds would simp
ly be misappropriated by the elite in the
name of ‘works’ undertaken for the poor.
The involvement of NGOs can provide a
check on this, but even in the best of cir
cumstances the existing NGOs may not be
able to cover more than one-fifth to one-
November 28, 1992
fourth of the areas.
Evolving appropriate institutional
mechanism for implementation constitutes,
therefore, the biggest challenge in the task
of integrating PAPs with overall develop
ment. Considering the past experience, the
improvement on this score is bound to be
a time-consuming process. Implementation
of socio-economic measures designed to
bring about structural changes in rural
society, improvement in literacy and
awareness levels of the poor and progress
towards group endeavour on the part of the
poor themselves will determine the pace of
success in the implementation of poverty
alleviation programmes. The dilemma fac
ed is, therefore, clear and unmistakable:
PAPs are needed most under conditions of
widespread poverty, prevalence of unorganis
ed activities, illiteracy and ignorance. It is
precisely these conditions which render plan
ning and, more so, implementation of these
programmes most difficult. TheSe program
mes can be better implemented as the
income levels rise and the staying power of
the poor improves and as their literacy and
awareness levels rise.
Self-Employment Programmes
Three major initiatives were taken by the
government during the Sixth and Seventh
Plans for self-employment of the rural poor.
They are: Integrated Rural Development
Programme (IRDP), TYaining of Rural
Youth for Self-Employment (TRYSEM) and
Development of Women and Children in
Rural Areas (DWCRA). Under the IRDP, 18
million poor households were assisted dur
ing the Seventh Plan period for acquisition
of productive assets with a total investment
of Rs 8,688 crore, including a subsidy of
Rs 3,316 crore, the remaining being the
institutional credit. The subsidy constituting
one-third of investment is shared equally by
the central and state governments. Of all
the activities selected under IRDP, 44 per
cent were in the primary sector, 18.5 per
cent in the secondary sector and 37.5 per
cent in the tertiary sector. The number of
scheduled caste/scheduled tribe beneficiaries
constituted 45 per cent of total number
of beneficiaries. In the case of women,
however, the achievement of around 19
per cent fell considerably short of the
target of 30 per cent of total number of
beneficiaries.
TRYSEM is designed to provide technical
skills and to upgrade the traditional skills
of rural youth belonging to families below
the poverty line, so as to enable them to take
up self-employment ventures under IRDP or
wage employment. During the Seventh Plan
about one million youth were so trained, of
whom 47 per cent took up self-employment
and 12 per cent wage employment, the re
maining being unable to avail of either. On
the other hand, a sizeable proportion of
IRDP beneficiaries who needed training
2605
could not receive it. those trained under
TRYSEM constituting only 6 to 7 per cent
of 1RDP beneficiaries.
Under DWCRA which was in operation
in 161 districts at the end of Seventh Plan,
groups of women are granted assistance to
take up viable economic activities with a
one time grant of Rs 15,000 for each group
to be used as a revolving fund. .About
28,000 groups could be formed during the
Seventh Plan with a membership of 4.6 lakh
women.
It appears from the various evaluation
studies as well as from our discussions with
the field-level functionaries and peoples’
representatives that the integration of
self-employment programmes with overall
development is even weaker than that of the
wage-employment programmes. Conse
quently, not only that their contribution to
overall development is meagre but income
generation for the poor also fails very much
short of expectations. For one thing, as men
tioned earlier, the relative importance of self
employment and wage-employment pro
grammes is almost invariant in different
parts of the country despite the significant
differences in infrastructural development of
the regions. Consequently, in areas of poor
infrastructure with insufficient linkages with
input supplies and marketing of output,
there are considerable inefficiencies and
wastages in the operation of IRDP, while in
the infrastructurally developed areas the
existing potential for efficient and
remunerative self-employment is not fully
exploited. Again, as mentioned before, the
bureaucratic processes, on which the govern
ment’s self-employment programmes are
heavily dependent, do not adequately ensure
the selection of activities which are in
consonance with the emerging demand. The
access to technical and financial assistance
and inputs is also far from adequate.
As in the case of wage-employment pro
grammes, the weaknesses in the operation
of self-employment programmes are pro
posed to be rectified during the Eighth FiveYear Plan by integrating them with area
development planning which is to be attemp
ted in a few districts on a pilot basis. Ac
cording to the Eighth Plan, instead of focus
ing on the supply side, i e, on fulfilling
targets in the case of IRDP, the matter
should be viewed “from the demand side,
i e, identifying activities which are ap
propriate, given the skills of the bene
ficiaries, the infrastructure and the linkages
available. Wherever necessary skills are not
of the required standard, this upgradation
should be facilitated under TRYSEM” [ibid,
P 37].
DWCRA has also suffered on account of
selection of unviable activities and lack of
investment. Therefore, during the Eighth
Plan period, formation of thrift and credit
societies is envisaged which will be entitled
to receive matching contributions from the
government. TRYSEM is also proposed to
2606
Govind Ballabh Pant
Social Science institute
ALLAHABAD
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Economic and Political Weekly
November 28, 1992
be better integrated with development by
time, group initiative and effort of the poor
(a) assessing training needs in terms of ac is promoted to check exploitation by mid
tivities which can either be started under
dlemen. The general level of consciousness
IRDP or in fields where wage-employment
and educr’ ^nal level among the poor is
opportunities are likely to increase; (b) im
much higher now than three decades ago
proving the skill endowment of trainees; and
when economists in India actively debated
(c) organising groups of persons in a par
the subject of co-operatives for the poor.
Besides, purely in the economic sense, the
ticular productive venture and bringing them
indivisibility-phenomenon is becoming
together for training. Besides training
increasingly important in many of the ac
in skills, training in entrepreneurship
tivities with modern practices or where
(i e, management, accounts, etc,) is also pro
technical services are important. Thus the
posed to be covered for self-employment
group or co-operative endeavour can offer
ventures by involving banks in the identifica
greater economic returns now than before,
tion of trades and beneficiaries.
partly through better use of modern equip
Within agriculture, the potential for self
ment and technical services but also because
employment has been increasing in non-erop
of better access to resources and knowledge,
activities like livestock production, dairying,
fisheries and forestry, the demand for which
and the pressure that the members of the
group can bring to bear on the seats of
is income-elastic. This calls for considerable
investment in the improvement of the cattle
power.
population and grazing land as well as land
reclamation and development of fisheries
Minimum Needs Programme and
and forests. Recent trends in employment
Measures for Social Development
also indicate a significant rise in employment
Social or human development through the
in the informal rural (non-agricultural) sec
provision of minimum needs such as elemen
tor, comprising households and small-scale
tary education, adult education, primary
manufacturing, services and construction,
health facilities, potable drinking water,
etc, the demand for which is highly income
public distribution of foodgrains, housing,
elastic. It is necessary to identify, at the
etc, has a direct bearing on poverty allevia
micro level, such newly emerging enterprises
tion both by improving the levels of living
and their requirements for training in skills,
or quality of life of the rural poor and by
finance and marketing infrastructure, etc.
generating employment for the rural youth
The best way to integrate self-employment
in the provision of such services. Com
programmes with overall development is to
pulsory primary education will help, among
reorient them towards these newly emerging
other things, to eradicate child labour and
fields.
thus ensure the physical and mental develop
Many of the livestock-based enterprises
ment of children. In general, social develop
are not land-intensive and as such typically
ment by raising the skills and awareness of
suit the marginal holdings and the landless.
the rural poor, will enable them to bargain
However, these activities, in general, require
for better terms in the rural markets for
government support for resources, training
wage labour, credit, land, etc, and will
in skills and marketing. Since the demand
eventually result in slowing down population
for these products is income-elastic, they are
growth. Thus apart from reducing poverty,
highly complementary to growth in general.
the measures for social development will
The banks need to play a much greater role
prepare the rural poor for effective parti
than at present, not only in providing credit
cipation in the developmental process in
directly to the poor but also in supporting
future.
pilot projects for identifying productive
Upgrading the skills of the rural artisans
activities for the poor, providing extension
through training will significantly contribute
services and carrying out evaluations, so that
to overall development by overcoming shor
the experience available is used for selecting
tages of skilled personnel. The skills to be
projects capable of being replicated. Since
upgraded should depend on the type of ar
many of these activities are capital-intensive
tisans in each area and local demand for
and skill-intensive, though not land
them. The training programmes and dura
intensive, those who have access to resources
tion will have to be flexible to suit local
and technical services may be quick to invest
requirements. In view of the training re
in such ventures and pre-empt the market
quirements for agricultural labourers and
to.’ those products. It is, therefore, impor
rural artisans on a large scale, and the need
tant to devise appropriate institutions for
to co-ordinate them and plan the require
public investment as well as for the provi
ments in a comprehensive manner, the
sion of various technical services on a
National Commission on Rural Labour
preferential basis for the enterprises run by
recommended that a district training in
the poor.
stitute be established in each district staffed
To the extent possible, these self
by competent trainers [Government of India,
employment activities should be organised
1991],
on a group or co-operative basis so that the
risks for the individuals are reduced and
The integration of minimum needs pro
economies of scale inherent in some of these
gramme and social development program
activities are fully realised while, at the same
mes with overall development does not pose
Economic and Political Weekly
November 28, 1992
any major problems in respect of choice of
activities or inter se priorities. Their con
tribution to development depends virtually
on the quality of implementation of such
programmes. For example, the literacy rate
would be low despite high rate of enrolment
of children because of high drop-ouis.
Similarly, despite a wide territorial coverage
by primary health centres, the achievements
in terms of decline in the infant mortality
rate and birth rate have been low for want
of adequate staff or medicines. Further, in
the case of water supply, the quantity
and quality of water supplied is relevant
rather than the number of villages covered.
In view of the above, the Eighth Plan
proposes to shift the emphasis from
mere targeting to achieving qualitative
results.
Conclusion
An attempt has been made in this paper
to examine the potential as well as the pro
spects for integrating the major PAPs in
rural areas with overall development. The
potential for such integration is quite high,
both by way of better choice of activities and
more effective implementation of the
activities chosen, the latter being far
more important than the former. Devising
appropriate institutional mechanisms
for planning the activities under PAPs
within the framework of area development
planning and, more particularly, for their
effective implementation constitutes the
biggest challenge in the drive for eradication
of poverty in rural areas.
[A slightly revised version of the Keynote ad
dress at the Commonwealth Consultation on.
Rural Poverty Alleviation, Colombo, Sri Lanka,
October 5-9, 1992.]
References
Government of India, Ministry of Labour
[1991 ]: Report of the National Commission
on Rural Labour, Vol 1, New Delhi.
—, Planning Commission [1992]: Eighth FiveYear Plan, Vol II, New Delhi.
Hirway, Indira et al [1991]: 'Report of the Study
Group on Anti-Poverty Programmes’ in the
Report of the National Commission on
Rural Labour, Vol II, New Delhi.
Rao, C H H, S K Ray and K Subba Rao [1988]:
Unstable Agriculture and Droughts—
Implications for Policy, Vikas Publishing
House, New Delhi.
Rao, C H H and P Rangaswamy [1988]: ‘Effi
ciency of Investment in IRDP: A Study of
Uttar Pradesh’, Economic and Political
Weekly, June 25.
Rath, Nilakanth [1985]: ‘Garibi Hatao: Can
IRDP Do It?’, Economic and Political
Weekly, February 9.
Subbarao, K [1985]: ‘Regional Variations in Im
pact of Anti-Poverty Programme: A Review
of Evidence’, Economic qnd Political
Weekly, October 26.
2607
SPECIAL ARTICLES
Public Intervention for Poverty Alleviation
An Overview
V S Vyas
Pradeep Bhargava
Although there is a high degree of uniformity in the approach and content ofpoverty alleviation programmes (PAPs)
in India, there is great variation across states in the outcome of these programmes. The reasons for this have been
explored in a research project in which nine states were selected for in-depth study of poverty conditions and
implementation of PAPs, the results of which are presented in this issue. The organisation and general findings of
the project are summarised in this introductory paper.
i
■
i
<
:
MUCH before poverty alleviation was put
on the development agenda of the developing
countries and multilateral and international
aid agencies, leaders of the independence
movement in India had accorded it the status
of one of the primary national objectives.
There are various reasons for India’s
commitment to poverty eradication. The most
important among these is the nature of the
national struggle which led to independence.
The mainstream political movement in India
was profoundly influenced by the Gandhian
approach which emphasised the need to uplift
the social and economic status of the poorest
of the poor, or ‘antyodaya’. Emphasis on an
egalitarian social order was reflected in the
policy documents which were produced by
the Indian National Congress. Most notable
among these was the report of the National
Planning (Kumarappa) Committee. The
committee was constituted at the instance of
Jawaharlal Nehru,
Immediately after independence, in
November 1947, the president of the
Congress Party appointed the economic
programme committee comprising some of
the senior and most respected leaders of the
party. This committee and its various sub
committees reiterated the national objective
of economic justice. While stating the aims
and objectives of the economic programme
for independent India, the first recom
mendation of this committee was: “A quick
and progressive rise in the standard of living
of the people should be the primary
consideration governing all economic
activities and relevant administrative
measures of the central and provincial
governments. The achievement ofa national
minimum standard in respect of all the
essentials ofphysical and social well-being
within a reasonable period must be pursued
as the practical goal of ail schemes for
economic development" [All India Congress
Committee 1948:3; emphasis added |.
The ideological commitment to poverty
alleviation was supported by pragmatic
considerations. Unlike several other
countries which gained independence in
Economic and Political Weekly
the 1940s and 1950s, the freedom struggle
in India was by and large a mass movement.
Large sections of the poor participated in the
struggle for national independence with the
hope that they would be given economic
wherewithal once the country attained
independence. The fact that the rich and the
powerful sections, especially in the rural
areas, sided with the British government
made it easier for the nationalist forces to
denounce the concentration of assets,
particularly land, in a few hands.
The basic orientation of economic policy
did not change after independence. In fact,
it was further reinforced with the introduction
of universal suffrage and a multi-party
political system. Under these circumstances
the slogan of, poverty eradication, ‘garibi
hatao’, was adopted by all political parties
in one form or another. It was also possible
to build a consensus on this objective, as on
several others, as the core of the political
system notwithstanding different party labels
was characterised till the end of the 1960s
by one or the other variant of democratic
socialism. The Nehruvian approach to lifting
the economy by its bootstraps by using
science-based, capital-intensive industries
as the lead sector, and public sector
enterprises acquiring the ‘commanding
heights’ in the industrial sector, had its
adherents among a whole variety of groups
and parties.
It is now well recognised that the translation
of professed national goals into economic
programmes and policies was fractured.
deliberately or due to ineptitude, and that
the objectives of economic and social justice
remained largely unrealised. Before pointing
out the failures and inadequacies of the
poverty eradication programmes (PAP)
pursued in India, we would like toemphasise
the importance of the national agreement on
the goal of poverty alleviation, since it is
not a common feature among most of the
developing countries; also, because such an
agreement on the principle of poverty
eradication blunted the edge of opposition
to the measures for poverty alleviation. Such
October 14-21, 1995
measures as are discussed in the following
paragraphs were, at least in the initial years
of independence, aimed at far-reaching
structural changes, e g, land reforms. Yet
none of these generated any active, overt
opposition except by groups or parties at
the periphery of the political system. The
national consensus on poverty alleviation
provided the necessary condition for
launching various schemes and programmes
aimed to achieve this objective. But the
persistence of poverty during all these years
suggests that the national consensus on
objectives did not, and could not, provide
sufficient conditions for poverty alleviation.
Approaches to Poverty Alleviation
Drawing from the experience of a large
number of experiments in rural development
involving local communities, the government
of India soon after independence launched
the Community Development Programme
(CD) to rejuvenate economic and social life
in the rural areas. The emphasis was on
infrastructure building at the local level and
investment in human resource development
through the provision of education and health
services. The programme was implemented
in well-defined geographical areas, or blocks.
During the pilot phase of the programme,
in a number of CD blocks remarkable results
were obtained. Once the programme was
expanded to cover the whole country, the
weaknesses of the socio-economic system of the administrative structure geared to
targetry, of the social structure dominated
by caste hierarchies, of an economic system
characterised by rent seeking tendencies came to the surface. The programme was not
supported by appropriate technological and
institutional reforms. Its impact on poverty
alleviation was not conspicuous in any part
of the country. The inadequacies and failures
of this initiative, as well as some of its
achievements, have been widely commented
upon by Indian as well as foreign "scholars
[Dey 1969; Dore and Mars 1981].
The frontal attack on poverty was pursued
in three successive phases. In the first phase,
2559
lasting from the beginning of the 1950s till
the end of the 1960s, the major emphasis
was on redistribution of land and improving
the plight of poor tenants: on abolition of
functionless intermediaries, on tenancy
reforms culminating in the principle of 'land
to the tiller’, on imposing ceilings on large
holdings, sequestering surplus land and
redistributing it among the landless
agricultural labourers and marginal farmers.
Apart from the anti-zamindari legacy of the
freedom movement, uprisings of the poor
farmers and landless labourers (the most
notable example of such uprising was the
Telangana struggle) also spurred the move
towards radical land reforms.
However, by the lime these structural
reforms were introduced in different states,
usually after lengthy legislative and legal
procedures, the wealthier sections of rural
society had consolidated their position and
a middle peasantry was making its presence
felt. The latter did not align itself with the
poor farmers but identified its interests with
those of the rich peasantry. Unfortunately,
the launching of redistributive measures
coincided with a growing deficit in
foodgrains. Soon after the government had
to assign a higher priority to the "grow more
food" campaign and more or less abandon
far-reaching structural changes. The net result
was that redistributive land reforms could
make a dent only on very large holdings and
that too in a few states. It could directly
benefit very few marginal farmersor landless
labourers. Similarly, tenancy reforms
benefited mainly the middle size tenants.
The position of the small tenants deteriorated
in many areas where the land was resumed
by the landowners on the plea of 'self
cultivation'. thus reducing small tenants to
the status of tenant-at-will.
A parallel and complementary movement
to state-sponsored redistributive landreforms
was started by the leading spokesman of
Gandhian thought, Acharya Vinoba Bhave.
This movement believed in 'change of heart’
of those whoowned large resources to induce
them toshare some of their assets, notionally
one-fifth, with their poor brethren. This
movement, the "bhoodan" movement.
achieved remarkable success in its initial
phase, but soon degenerated into "targetry"
and got diverted from its original purpose.
Lack of sufficient effort to support the
bcneficiariesofthe"land-gift" further weak
ened its contribution to poverty alleviation.
By the late 1960s the second phase of PAP
started with measures that promised to
address directly and exclusively the poor in
the rural areas. This target group oriented
approach started with the programme for
backward regions, graduated to the
programme for the development of small
and marginal farmers, landless labourers,
etc. and finally culminated in the Integrated
Rural Development Programme and National
Rural Employment Programme. Serious
2560
efforts for poverty alleviation were initiated
only during this phase. The distinguishing
featurcof the poverty alleviation programme
during this phase was the emphasis on
creating employment opportunities and
distributing renewable assets among the poor.
This was in sharp contrast to the intentions
in the earlier phase, i e, redistributing
existing, non-renewable, assets. Similarly,
heavy emphasis was placed during this
phase of PAP on transfer of income to the
poor in indirect ways, e g, through food
subsidies and 'dual pricing’ of essential
commodities. Recourse was taken to soft,
non-confrontationist measures.
An important implication of this approach
was that efforts at'poverty alleviation were
not conditioned by the political labels of the
ruling parties in different states. The success
or failure of these efforts were independent
of whether a state was ruled by a rightist.
centrist or leftist party. If poverty alleviation
efforts were to concentrate on the
redistribution of non-renewable resources
such as land, the political base of the ruling
parties would have made a significant
difference.
In the third - the latest - phase starting
from the beginning of the 1990s, emphasis
has shi fled to measures aimed at accelerating
economic growth and on creating an
environment for ensuring a 'spread effect’.
In keeping with Indian traditions, lip-service
is continued to be paid to structural change,
as much as to targel-group oriented
programmes, but the dominant thought is to
create more wealth and to enable the poor
to benefit from the secondary effects of
growth which, it is presumed, will percolate
down and reach the poor.
Although over time relative emphasis has
shifted from structural interventions, to a
target group oriented approach, to market
oriented policies, all states have acted in all
these phases, more or less, in unison. If one
finds different achievements in terms of
poverty alleviation in various states, it is not
because the major thrust of the programmes
were dissimilar or the strategics wereunique.
Such differences have to be explained in
terms of th.e initial social and economic
conditions, specific geographical and
demographic features, the pace and
composition of economic growth, the relative
emphasis placed on different poverty
alleviation programmes, and the processes
of and competence in programme for
mulation and implementation.1 The studies
in this issue examine many of these, and
quite a few other, aspects of the poverty
alleviation efforts in different states in India.
I
Design of Study
There is a uniformity of approach and. to
a large extent, of content, of poverty
alleviation programmes in India. The
implemcntingagencies for these programmes
are the states. The outcome of poverty
alleviation efforts, as is well known, differs
from state to state. The dent in poverty in
different states of the country can be
explained 6nly in the socio-economic,
political, geographical and demographic
context of the states; states’ capabilities to
implement such programmes; and institutions
that exist at the ground level to support the
disadvantaged sections of society. These
assumptions were to be tested in the present
study, titled 'Public Interventions for Poverty
Alleviation: Experience of Indian States’.
For this project nine states were selected for
in-depth study: Andhra Pradesh. Bihar.
Gujarat. Haryana, Karnataka. Kerala.
Maharashtra. Rajasthan and West Bengal.-’
The temptation to include more slates had
to be resisted because of the paucity of time
and resources.
The selection of states was mainly, though
not solely, governed by the availability of
scholars who have conducted serious studies
of poverty related questions in their respective
states. But once the states were selected,
certain importantcharacteristicsofeach state
could be identified and related to its poverty
alleviation programmes. For example, the
selection of Haryana facilitated the study of
the poverty situation in a dynamic rural
economy. As against this, Bihar could
represent similar initiatives in a stagnating
economy with weak rural institutions. West
Bengal and Kerala, both governed by leftist
political parties, could illustrate a concerted
move towards structural change in the rural
economy in one case, and the impact of
investment in human resource development
in the other. Karnataka is one of the few
states where decentralised development was
tried out without initial political mobilisation.
In Andhra, the intriguing feature was a
favourable impact of PAPs on the poverty
situation in the context of a stagnant
economy. Maharashtra provided a unique
example of guaranteed employment, virtually
on the doorstep, to anyone who offers him/
her for a job. Gujarat qualified for such a
study because of its vibrant grass roots
organisations, the co-operatives and NGOs.
Finally, Rajasthan’s inclusion could illustrate
the nature of transient poverty which arises
because of sharp weather-induced
fluctuations in agricultural production.
There are several states with other
distinctive features which could have been
included for such a study. However, the
paucity of resources and in some cases lack
of serious studies in the area of poverty
alleviation, inhibited inclusionofmorestates.
At the same time, the states selected present
a cross-section which highlights some of the
major determinants of the success or failure
of poverty alleviation programmes. While
the main focus of the study was on the
policies and programmes al the state level.
it was realised that the importance of macro
Economic and Political Weekly
October 14-21, 1995
(iii)
a discussion of future directions on the
economic policies as well as overarching
basis of the above.
political processes for poverty alleviation
programmes at the state level should not be
II
missed.
The group identified to conduct this study
Extent and Nature of Poverty
along with a few other scholars met for the
There is no agreement among scholars on
first lime in Udaipur in July 1989. In this
meeting the objectives and methodology of
the extent of rural poverty in India. Estimates
the study w*erediscussed in detail. It was also
on the proportion of poor households
decided that the major output of the study
among the total number of rural households
will be the nine state-level case studies. A
for the year 1987-88, which is the last year
format for these case studies was agreed
for which country-wide reliable data from
upon. To examine national policies as they
the National Sample Survey (NSS) are
influence state level PAPs, a paper on
available, vary from 25 to 45 per cent. Some
Political Processes and Poverty Alleviation
scholars have come to the conclusion that
(by Kuldeep Mathur) was added.
poor households constitute as little as 25 per
Principally, each case study was to include:
cent of the total rural households [Dev el
(a) discussion of social, economic and
al 1992J, while other scholars maintain that
geographical features of the slate as
the proportion is as high as 45 per cent
these impinge on poverty alleviation
[Minhas et al 1991J. The official sources,
efforts;
i c, the Planning Commission, place the rural
(b) discussion of rale and composition of poverty level at around 33 per cent of the
economic growth and its impact on
rural population. An expert group appointed
poverty alleviation;
by the Planning Commission which included
(c) a critical review of national PAPs (IRDP, several distinguished economists placed the
figure of rural poverty at around 39 percent?
JRY, etc) in the state;
(d) discussion of any major initiative taken Even if some highly optimistic or highly
pessimistic estimates arc excluded, the figures
by the state with the objective of poverty
alleviation; and
on rural poverty given by different scholars
(e) suggestions for future directions to vary significantly. Why should there be such
accelerate the paceof poverty alleviation
a difference in the extent of poverty when
the basic source of data used by all scholars
in the state.*
is the same, i e, various rounds of the NSS?
It was understood that the above formal was
The starting point for estimating the
only a suggestive one, and each case writer
number of households below the poverty
was free to amend it.
line is a normative nutritional requirement
The same group with some alterations met
per person per day at some base point. There
in Jaipur in October 1991 and again in
is a debate on the minimum caloric
August 1992. In the latter meeting five of
requirement, and whether it should be the
the nine case studies which were more or
same for all parts of the country.Most
less in finished form were discussed in detail,
acceptable figures are 2,400 calories per
and the outlines of four more studies were
person per day in rural areas, and 2,200
elaborated. It was also decided that the
calories per person per day in urban areas.
authors of those case studies which were
The next step is to translate the nutrient
more or less complete should take into
requirement into monetary terms. The expen
account the comments made in this meeting
before finalising their papers. The remaining
diture level of households which are able to
four studies were also to be completed on
spend the requisite amount to obtain the
the lines of the agreed formal. It was further
desired calories serves as the cut-off point,
decided that one more meeting of the group
or the poverty line. To adjust the poverty
will lake place to take a final look at the case
line over a period of lime, price variations
studies as well as to critique the overview
have to be considered and an appropriate
paper. Unfortunately this meeting could not
price deflator hasp be selected. The problem
arises in deciding upon such a deflator.
take place. But the remaining case studies
Thus, the followingelements mainly affect
were submitted to the chief co-ordinator of
the magnitude of the poverty ratio: (i) the
the project. Mainly on the basis of the case
studies, but also using other relevant
nutrition norm (translated into monetary
literature, the co-ordinator of the study,
terms) in the base year; (ii) price deflator
V S Vyas, in collaboration with Pradeep
used taupdate the poverty line; and (iii) pro
Bhargava. prepared the overview paper. The
rata adjustment in the number of households
overview paper discusses;
in different expenditure classes to determine
(i) the nature and extent of rural poverty the number of households below and above
and the trends in poverty alleviation in
the poverty line. Different assumptions and
the country in general and in the selected
methods are used for these three purposes,
which accounts for the different estimates
slates in particular;
(ii) a critical examination of the general provided by scholars?
The assumptions made and methodology
strategy as well as specific programmes
adopted by the expert (Lakdawala) group of
for poverty alleviation; and
Economic and Political Weekly
October 14-21, 1995
the Planning Commission appears to be the
appropriate one. As mentioned above, the
expert group has estimated the number of
poor households in rural India at around 39
per cent of the total in 1987-88.
Over lime a few noticeable changes have
taken place in regard to the extent of rural
poverty. First, in the last two decades there
has been a continuous reduction in poverty.
In 1973-74 the proportion of rural households
below the poverty line was around 55 per
cent (54.3 per cent to be exact). It went
down to 52 per cent in 1977-78 and to 45
per cent in 1983, and now it is around 39
per cent . Thus, there has been a marked
decline in the proportion of poor households
in rural areas. Second, this decline is
witnessed practically in every state of the
country, although the magnitude of decline
has differed. The important fact to be
emphasised is that there has been a decline
in poverty practically in every stale.
Third, and it is important to note, even
in the poorest states the pervasiveness of
poverty has been reduced to a remarkable
extent. For example, in 1977-78 in two states
of our country, Orissa and Bihar, the
proportion of rural households below the
poverty line was 65 per cent and 75 per cent
respectively. By 1987-88 there was not a
single stale which recorded such severe and
pervasive poverty. On the other hand, in
1977-78 (here was only one slate, Punjab,
which had less than 20 per cent of its rural
households under the poverty line. By 198788 there were three stales viz. Punjab,
Harayana and Himachal Pradesh, where
poverty was less than 20 per cent . More
importantly, there are many more states which
have made remarkable progress, from allpervasive poverty to a rather manageable
extent of poverty.
Fourth, there has been a noticeable
improvement in the nutritional status of the
poorest households as reflected in calorie
intake. As mentioned earlier, (he normative
base for estimating poverty in our country
is an intake of 2,400 calories per capita per
day in the rural areas (plus an additional
expenditure on other necessities), and 2200
calories per capita in the urban areas (along
with additional expenditure). Compared to
these high norms of calorie intake, in a
number of states the average per capita per
day calories intake has come down. But
inequality in food consumption has been
reduced, and to that extent it can be reasonably
assumed that malnutrition among the poorest
deciles has come down to a considerable
extent. These developments should "be
appreciated Before asking the question why
we could not do better.
Experience in poverty alleviation has
varied in a significant manner among the
stales. We may divide the 18 year period
from 1970-71 to 1987-88 into two sub
periods, the first between 1970-71 and
2561
1977-78. and ihc second between 1977-78
and 1987-88; the first period may be called
the pre-poverty alleviation programme
period, and the second the post-poverty
alleviation programme period. In the first
period the target-group approach to poverty
alleviation was absent. It was presumed that
changes in agrarian structure and overall
economic growth were the factors which
would help poverty alleviation. As noted
above, during the second period, roughly
beginning from the late 1970s. the targetgroup oriented approach was accepted.
Poverty alleviation programmes such as the
Integrated Rural Development Programme
(1RDP). National Rural Employment
Programmes (NREP). etc. were emphasised.
Although these programmes were started
earlier, it was only from the late 1970s that
these various schemes gathered momentum.
For the country as a whole, the poverty
ratio declined in (he first period by less than
3 per cent. The decline in the poverty ratio
was slightly above 9 per cent in the second
period. We have observed above that there
had been a fall in the poverty ratio over the
period of lime. It has to be noted that the
decline in the poverty ratio was precipitated
during the second period when deliberate,
targeted attempts were made to alleviate
poverty. This outcome is of considerable
significance.
The statewise picture of poverty reduction
in the two periods is quite interesting. Decline
in poverty was uniformly distributed between
the first and the second period in Andhra
Pradesh. Haryana and Tamil Nadu. West
Bengal on the other hand observed a fall of
nearly 15 per cent in the proportion of poor
households in the rural areas in the second
period, as against only 4 per cent decline
during the first period. This was also the
experience of Karnataka and Kerala. Il is
significant to observe that states such as
Karnataka, Kerala and West Bengal have
better records in the implementation of PAP.
What is observed at the state level docs
not necessarily hold true for all the regions
of a state. There are sharp intra-state
variations in the incidence of poverty as well
as the extent of its decline over time. In most
of the states there are ‘high’ as well as ‘low’
poverty regions. In Andhra Pradesh, for
example, the backward regions have
significantly higher incidences of poverty,
and the ratio of poor households to total
number of households is increasing. There
is a growing concentration of poverty in the
dry and poorly endowed regions of the slate
(Parthasaralhy).5 Similarly, in Maharashtra
the inland eastern region has the highest
incidence of poverty and the inland western
region the lowest (Dev). In both Karnataka
and Gujarat, the regional disparities in this
respect are remarkable and the regional
concentration of poor households is widening
(Vyasalu, Hirway). Unfortunately, enough
data on poverty at the regional level are not
available to allow fora meaningful analysis.
The results of the 27th round of the National
Sample Survey (NSS) (for the year 1983)
were presented for various NSS regions. The
base year poverty d i fferences i n these regions
could be highlighted with the help of these
data. The 14 agro-climatic regions of lhe
country could be ranked in terms of level
of poverty. These regions, however, cut
across state boundaries and therefore are not
very helpful in understanding intra-state
differences. In any case, no such region
specific estimates are available from the
later rounds of NSS.
A few sporadic efforts are being made to
understand the intra-state poverty situation
by researchers. The Centre of Economic and
Social Studies (CESS) has developed district
and regional level poverty estimates for
Andhra Pradesh for lhe years 1977-78 and
1987-88. The only other effort of this nature
that we are aware of is the regional delineation
of the poverty profile for Gujarat done at
the Sardar Patel Institute. Ahmedabad. During
lhe course of this study a similar attempt was
made at lhe Institute of Development Studies,
Jaipurtoobtain poverty estimates for different
regions of Rajasthan (Vidya Sagar). Apart
from these few exercises, there are hardly
any other systematic efforts to assess the
poverty situation al lhe regional level. As
noted above, poverty has declined over lime
in practically every state of lhe union, but
the states are large units. What is happening
within a slate, i c. in different regions, is not
carefully analysed. This is one of the major
gaps in our understanding of the poverty
situation.
Characteristic's of Poor Households
As is well known, it is largely the assetless
among lhe rural households, e g, agricultural
labour households, who account for lhe most
substantial btock of poor households.
According to the 38th round of the NSS at
theall-India level, in 1983 agricultural labour
households in the rural areas constituted
30.7 per cent of all rural households, but
their share in the poor rural households was
42.0 per cent ? Nearly half of the rural poor
in Andhra Pradesh, Bihar, Gujarat,
Karnataka, and West Bengal are agricultural
labour households. These households are
landless or have very small land holdings.
Self-employed agriculturists, mostly small
and marginal farmers, form another major
constituent of the poor households. As the
case studies in this issue report, at the state
level the di fference in the i ncidence of poverty
between agricultural labour households and
those self-employed in agriculture is
relatively small in Andhra Pradesh, Harayana
and Rajasthan, while it is greater in West
Bengal and Bihar. The relative importance
of agricultural labour households versus
marginal farmer households among the rural
poor reflects employment'opportunilics on
lhe one hand, and land holding structures
on the other, in lhe selected states.
Another distinguishing characteristic is
lhe caste composition of lhe rural poor. The
scheduled castes and tribes contribute
disproportionately to the poor households in
rural areas. For example, m Kerala they
constitute 10 per cent of the total population
but 23 per cent of all poor. In all the states.
these groups (i c, ST and SC) account for
a disproportionately large share of lhe rural
labour households, i e, lhe households who
do noi own productive assets.
The lesson is clear that rural poverty is
directly related to lack of access to productive
assets. It is for this reason that poverty
alleviation strategics ought to focus more on
providing productive assets to lhe poor. After
lhe earlier phase of reforms in agrarian
structure we did not make any serious effort
in that direction. The reasons for the relative
neglect of redistributive land reforms will
be briefly alluded to below. However, if we
were to enlarge the definition of assets and
include noi only land but skills and
capabilities and also physical stamina as the
assets of the poor, the programme of asset
redistribution takes on another more
manageable dimension. In fact, lhe states
that concentrated on asset generation for lhe
poor, understood in wider terms, did much
belter than other stales in terms of poverty
alleviation. Before we narrate the experience
in this regard, it is important to understand
the role which economic growth perse plays
in poverty alleviation.
in
Economic Growth and
Poverty Alleviation
Among various factors contributing to
poverty alleviation, economic growth has
always been recognised as an important one.
A view is gaining ground in the country that
the money spent on PAPcan be better utilised
as investment in developmental activities,and
that the ensuing economic growth will be
a better contributor to poverty alleviation.
Assuming that all lhe money diverted from
PAP will be fully and effectively used for
development purposes, and that such
investment will generate growth - two rather
heroic assumptions - let us examine the role
of economic growth in poverty alleviation.
The evidence from the experience of a
large number of countries is that while the
impact of economic growth on reduction in
inequalities is mixed, its impact on poverty
reduction is unambiguous (World Bank
1990]. However the benefits of growth arc
observed to be accruing to different economic
groups approximately in proportion to their
initial incomes. Further, the composition of
growth appears to be important in explaining
its impact on poverty alleviation. It is
i
Economic and Political Weekly
October 14-21, 1995
2563
generally agreed that growth propelled by
an increase in agricultural output has a more
pronounced effect on poverty alleviation.
In recent years the positive relationship
between growth in agricultural production
and poverty alleviation seems to have
weakened [Gaiha 1991]. Even then the
positive impact of agricultural growth on the
income of small farmers, and more
particularly on the wage income of
agricultural labourers, cannot be denied. The
latter is important.In the face of inequality
in the distribution of land-holdings, the
positive impact of agricultural growth on
poverty alleviation depends more on the
capacity to generate employment. A fall in
elasticity of employment with respect to
agricultural production, as observed in many
areas, explains the weakening of the
relationship noted above.
In this context, growth in, the non-farm
sector in rural areas assumes importance
This is clearly brought out in the study of
poverty alleviation in Harayana (Bhalla). A
significant reduction in rural poverty in
Harayana in spite of a marked reduction in
employment opportunities in agriculture
could be explained by a remarkable increase
in non-farm employment. The study of
Andhra Pradesh has also brought out that
poverty declined more rapidly in thedistricts
adjoining Hyderabadcily compared to (hose
in the interior, mainly because of growth
in non-farm employment on the periphery
of this city (Panhasarathy).
Besides sectoral composition of growth,
another factor which affects the ‘trickledown' of the benefits of growth to the poor
is the availability of infrastructure, physical
as well as institutional. Apart from the direct
effect of the development of infrastructure
on enabling a faster pace of trickle down.
it also enhances the mobility ol the poor,
and with it the potential areas for employment
opportunities.
A cross-section analysis of the 17 Indian
states to explain fall in the ratio of poor
households in rural areas between 1977-78
and 1987-881 Vyas and Sagar 1993] suggests
a significant and positive impact of the
development of infrastructure and access to
assets on the fall in the poverty ratio, while
the impact of growth perse is, at best. weak.
It is also observed that when there is a
significant investment in human develop
ment (as reflected in an index of human
development) and greater equality in the
ownership of assets (as reflected in low
concentration ratios) the ‘trickle-down’ effect
of growth becomes more pronounced. In
other words, growth is important but growth
by itself will not ensure a ‘spread effect’.
The latter will be facilitated to the extent that
there is (a) a developed infrastructure and
(b) low concentration of assets, i e, the poor
also have access to productive assets. Once
these two conditions are fulfilled, growth
2564
will reach the poor. These findings have
been corroborated by the case studies reported
in this volume
IV
Strategic Intervention
for Poverty Alleviation
As a general strategy for poverty
alleviation, an emphasis on more equitable
distribution of ownership and access to land.
reforms in the credit delivery system to
enable the poor command over productive
resources; and a public distribution system
(PDS) for foodgrains to contribute to
improvement of nutritional standards of the
poor by bringing down the real cost of
foodgrains, have all played an important
role in poverty alleviation in this country.
These are all pro-poor measures However,
(heir less than satisfactory impact warrants
a closer look al the efficacy of these
programmes.
Land Reforms
The process of impoverishment of the
rural masses in India is very well documented.
There is a consensus on thre role of
colonialism, of the penetration of market
forces and of the iniquitous social structure.
on the widening and deepening of poverty
in the countryside (Dasgupta). It is also
commonly agreed that in the posti ndependence era, the pressure of population
on land leading to sub-division and
fragmentation of agricultural holdings, and
lack of employment opportunities in the
non-farm sectors worsening the plight of
agricultural labourers, have further swelled
the ranks of the poor. The emergence of a
class of rentiers protected by the slate and
legitimised by the social system hastened
this process. The bulk of the poor households
in India are located in rural areas and among
these, the vast majority are landless
agricultural labourers and marginal farmers.
More equitable access io land, therefore,
would be an important poverty alleviation
measure.
Land reforms as a programme for ushering
in a just social order was an important item
on (he national agenda even before
independence. The popular governments
which took power in different stales for a
brief period in the late 1930s lost no lime
in legislating land reform measures. These
reforms became more extensive and coherent
after independence. An interesting aspect of
land reforms in India is that although this
is a slate subject - only recently have some
of the provisions of land reforms been
brought wunder the concurrent list - the
content as well as the liming of land
legislation have been broadly similar in all
states. Rather minor variations in lhe content
or liming arc easily explained due to special
circumstances in lhe concerned state.
Land reform legislation broadly follow^
lhe following sequence throughout ihc
;oui
country:
- abolition of funclionless intermediaries yen
he |
- protection to tenants;
- imposition of a (rather liberal) ceilinc hin
’8 ,110'
on land holdings;
he
- ownership right to tenants;
hos
- more stringent ceiling legislation.
ena
There are a number of penetrating studiej:s,
on lhe legislative content, implementation■ gh
processes, and impact of land reforms <or!"h;
productivity and equity in different states>ijha
India. Some of the collaborators in this stud) rec<
(Dasgupta, Panhasarathy, Sharma) have thei
ceil;
documented the impact of land legislation
on poverty alleviation in their respective cre<
legi
states.
There are a few facts which need to
highlighted in lhe context of the present vill.
study. As a poverty alleviation measure, the cou
wer
main emphasis of land reforms until recently
was on redistributive policies. The successive
lowering of lhe ceiling on agricultural
holdings (which was first introduced in the to c
mid-1950s) in the early 1960s and again in rad
the early 1970s was aimed at sequestering and
the surplus land and redistributing it among pari
landless rural households or those who 2ro
cultivated marginal holdings. Except for one ‘Na
or two states, e g. West Bengal and Kerala ten.
this programmedid not make any remarkable are.
impact on poverty. For lhe country as < mo
whole lhe picture that obtains suggests that of I
the land declared surplus was much less than loo
what was anticipated; land acquired wa:
much less than the land declared surplus to \
land distributed among landless labourer: in i
and marginal farmers was much less that son
lhe land acquired; and land which couk me;
actually be cultivated was much less thar enh
lhe land acquired. Leakages at every stej cia>
J
were glaring, and the reasons for this are als< ,n s
is ;
well known.
The concentration ratio of landholding ph.
wa
did decline. In particular, the share of largi
holdings in total holdings went down it ma1
every state of the country. But thes on i
changes were mainly due to factors sue! cin
1
as (a) demographic pressures leading mo
1
sub-divisions of holdings; (b) opportunity OCl
1
to increase agricultural output on mediur sec
:
size holdings by investment of capital rathe of
than expansion of land; and (c) increaseI
risk in further expansion of holdings 11 ref.
the face of ceiling legislation. The lowerin on<
of concentration of land among the larg :im|
land holders was not because of eithe leg
effective implementation of land reforms^ the
state bureaucracies, or lhe organisation o pa
the intended beneficiaries. Howevei in <
redistributive land reforms did contribut int<
directly or indirectly to stopping the proccs lea
of proletarianisation, in hailing furthe for
expansion of large holdings, and 1 hoi
contributing to lhe emergence of a m>dd* agi
ris
peasantry [Vyas 1986].
Economic and Political Weekly
October 14-21.
In regard to the impact of tenancy
legislation will be a logical extension of
‘Operation Barga’ type reforms.
•gislation, after the initial ‘shuffle’ in the
juntrysidc, when a large number of tenants
With the preoccupation of policy-makers
.ere evicted from land by landowners on
with privately owned agricultural holdings,
sufficient attention was not paid to the
tic plcaof resuming land for self-cultivation,
common lands till very recently. The
hings have started settling down. Even when
llowance is made for concealed tenancy,
disappearance of the commons or their pre
he area under tenancy has declined, but
emption by the rich and powerful of village
hose tenants who could formalise their
society has blocked opportunities for income
enancy agreements could be assured of
generation for the poor from the products
egislative protection against eviction and
of the commons, apart from doing irreparable
,-nhanced rents. After the initial unsettling
ecological harm. The damage done in this
>hase, most of the states have had a better
respect is more severe for the poor, whose
record in tenancy protection compared to
dependence on the products of the commons
:heir performance in implementation of
is proportionately larger. It is only recently
ceiling legislation. West Bengal has the most
that steps have been initiated to rejuvenate
creditable record in this respect. State
degraded village commons and protect the
egislation on ‘Bargadars’ and its effective
rights of village communities, especially the
.mplementation with popular support at the
poor, in the use of the commons. NGOs more
village level ensured that share-croppers
than state functionaries are spearheading
;ould not be evicted from their land and
such activities.
A’erc assured of continuation of tenancy and
Also, the exclusive attention paid to land
a fair share of the produce (Dasgupta). In
has meant that the equitable access of the
a few other states it is becoming difficult
poor to forests, fisheries and water resources
io evict share-croppers due to popular and has not been appreciated. Only in recent
j
organisation of the small peasants
years some steps have been taken to provide
, ancoandless labourers. For example, in
the poor access to forests, particularly the
’ parts of Andhra Pradesh and Bihar several
tribals living in or around forests. But in this
^groups known by the generic name of
respect legislation is probably at a stage
,‘Naxalitcs’ are protecting the rights of
where land legislation was in the 1950s. In
' tenants, at times by violent means. In these
regard to equitable access to water, in spile
’ areas the state machinery is also becoming
of several ideas being floated, hardly any
^more conscious about the implementation
effort has been made at the state level. Some
u of land reforms and the plugging of various
voluntary organisations such as *pani
panchayats’ in Maharashtra, have taken the
n loopholes.
lead in this direction.
iS A question is posed in different fora as
io whether land reforms are at all relevant
Access to Credit
rs’in the present circumstances. According to
insomc scholars, the urgency for impleId mentation of land reform measures has been
in enhanced because of the re-emergence of a
,p class of rentiers among the large landholders
sOin some parts of the country. This in a way
is a reversal of what happened during the
.,sphase of the ’green revolution’. The latter
*ewas characterised by a convergence of
^management and ownership of land, even
.sc oMMdium and large holdings. In the present
iC|- c^Jmstances. the affluent landlords find it
Ic more profitable to invest in non-agricultural
ie. occupations and assume the role of rent
yn- seeking absentee landlords rather than that
heiof capitalist farmer (Parthasarathy).
>ec Effective implementation of existing land
in reform legislation is important for more than
mg one reason. Apart from the disruptive social
lfge implication of non-implementation of land
hei legislation, such failures are also depriving
sbj the poor of participation in the development
n ol process. Second, land reform which assists
vCr in defreezing the lease market will be in the
bate interests of the poor. A properly functioning
,cc$J lease market enables the poor to acquire land
tliei for cultivation to supplement their meagre
j ir holdings, or facilitates search for a nonjdlt agricultural work opportunity without the
risk of losing land. This type of land
199- Economic and Political Weekly
Availability of credit to the poor on
affordable terms can create the preconditions
for access to productive resources. With this
objective in view, far-reaching changes have
been introduced in the credit delivery
mechanism in this country. These include
expansion of the network of rural branches
of the commercial banks, mandatory lending
to priority sectors, discriminatory interest
rales in favour of the poor, and the like. The
objective of access to easy credit has been
thwarted to a large extent by lack of proper
response from the financial institutions. The
credit institutions see lending to the poor as
a burden rather than a good and feasible
investment. Their approach tocrcdit supplies
for the poor have been developed without
a fuller understanding of the poors’ needs
and aspirations.
By definition, the rural poor have few
assets, but in many instances they do have
some skills. One of the major constraints
they face in making productive use of their
assets and skills is access to credit. There
are several limitations at theirend - illiteracy
and lack of awareness and experience with
formal credit institutions. For women it may
be especially difficult to obtain credit: the
types of work women engage in may not be
October 14-21, 1995
recognised as productive enough to be
creditworthy, and on many occasions social
disapproval and family pressures discourage
them from economic activities outside the
home.
The poor generally need small amounts
of credit. The credit requirement at times is
a series of small, short-term loans for working
capital which may ensure, for example, the
supply of raw materials to carry out smallscale activities. They invest in activities with
a quick cash turn around. Activities revolve
around frequent marketing such as petty trade,
food preparation, handicrafts using local raw
materials, or services with a local demand.
Some of the poor who make it to the external
market need a higher amount of credit.
The big financial institutions generally
find the proposed business of the poor to
be too small to justify their efforts. They may
impose unreasonable service fees for smaller
loans and first time borrowers. Processing
and/or administration of loans may take too
much time away from the poor. Collateral
requirements may be too rigid and repayment
schedules inappropriate for (he types of
busines**
cd by the poor.
An important innovation in credit delivery
systems has been the establishment of
regional rural banks (RRB). These
institutions are designed primarily to meet
the credit needs of (he poor. They do make
small loans, mainly to the beneficiaries of
the Integrated Rural Development
Programme (IRDP); these are of fixed
amounts and generally lack flexibility. There
is no service fee but the loan application
moves through a number of channels,
increasing the transaction costs of both the
poor borrower and the bank. The borrower
still spends a lol ofjime^+nisingTis or her
application. The collateral condition for (he
poor borrower in the IRDP has totally been
done away with, and the interest rate is lower
than the market rale, but the loans are linked
to a direct subsidy by the government. This
erodes the authority of the banks
(Parathasarathy). Repayments have been
subjected to external political interventions.
These, together with motivational and
organisational handicaps, have impaired the
effectiveness of the RRBs. The regional
rural banks arc too happy to sec an IRD
account closed when all repayments have
been met. No attempt is made, rather no
thought is given, to the needs of the IRD
beneficiary after the loan has been repaid.
The opportunities given by IRDP, as will
be discussed below, favour activities that
promote redistributive (as reflected in the
subsidies) rather than productive activities,
and restrict opportunities rather than expand
them. They seldom induce investment in
education that increases productivity
(TRYSEM is an exception). The organi
sations that develop in this institutional milieu
could become more ‘efficient’ over time-
2565
tk:i‘vitfficieni’ in making the poor even
/•' y^ndcni. and hence unproductive.
Sao^’Jhasic institutional structure even
a,lie<ljcive to productive activity.
Pr°grj above context, some of the
Pei that the credit delivery systems
ol xoq
Petjte or expand the financial markets
10 wa?ut distorting product or factor
Cenl).S;
exPcnjve a lending design that reaches
ccnt- poor while minimising the
action costs;
Ciinimise the cost of lending
□lions while keeping the interest
^enough for the poor to ensure
PHwn.jpation:
^roin>ign cost cflccii vc methods to scale
h.isis ^service deli very mechanism both
'"?veri()iitally (among a larger number of
UP- $*or in a larger geographical area)
vertically (more investment
(^Ojnimities for the poor who have
ment^iy ^een successful in increasing
scheri income);
P^jB-orporate schemes which finance
,rwBn capital formation so that the
.luctive capacity and hence the
meat ^worthiness of the poor enhances;
been <
M^ct the above challenges and ensure
nicnl* credit programmes arc being cost
^on,e.live and are not dependent on
P’bial subsidies.
ura* words, what is needed is a strategy
ro^’n> sustained livelihood to the poor
s ensures the sustainability of the
k. Silulions. So far we have not been
k’^el volvc such a strategy.
1 k- $this context that we should make
1 c ® e ffo rt s I o Iea m fro m t he s u c ces s fu 1
rni inls in
counlry an^ abroad.
* ogrammes such as the Grameen
’ ^Bangladesh. the Action projects in
’ ^icrican countries, and the BKK in
• |u,’iavc^ccnsucccss*'u’111 increasing
eva ics of the poor while ensuring loan
CI •’ .its. They have also been successful
degrees in empowering the poor.
r
ol
slralcgy01 suc^
D| ECu’‘lramme'' *s to ^rea^ l^c cnlry
' *. for the severely disadvantaged
h *ho do not have the conventional
, 'ilcs to entitle them to the services
lu° |5na’crc^11 institutions. No economic
111 il. no enhanced technological
pancn.
..
1
Jge. no literacy, no money
nrmtr b
J
in
* u lent experience and no social pull
t’CnCn
‘
rut
Tyyipary 10 slart a project. Small loans
..iced, and once repaid, further loans
P'’rLjoncd. This is expected to initiate
^-process in which better know-how
!'S Ma;>Pcd- skills are honed and the
’• ‘ j.c of the poor in themselves and in
the sfl
r
,
.
.JI management system develops.
,rt'who are marginalised in terms of
P* ? and controlling assets, now have
and Political Weekly
access to formal credit and arc being paid
for their labour. They arc able to gain control
over their own lives, and most important.
are able to organise better lives for their
children, an activity for which they alone
are responsible in a poor family.The financial
principles are based on a form of social
collateral as against economic collateral. In
the Grameen Bank, a lot of emphasis is given
to group formation with well laid out
procedures. Larger amounts of credit arc
advanced if a loan is repaid. This incentive,
plus pressure from the peer group, strong
and decentralised management systems, the
collection of repayments in small amounts
suitable to circumstances in which the poor
earn and live, together result in net
repayments to the tunc of 90 to 95 per cent
in all these schemes. Transaction costs are
kept low by a minimum of pre-loan screening
and paperwork as well as by technical
assistance The poor have been able to
increase their incomes and also accumulate
some capital.
The design of these credit programmes
has been singularly successful in not
distorting credit markets by lending at the
market rate of interest. Besides, the
programmes pay the poor in cash and exercise
no control over what they buy Any control
over their buying would have decreased the
value of commodity for the poor and set
distortions in the product and factor markets.
With a continuous flow of credit, the
programmes have successfully intervened
in the interlocked markets where the poor
borrower was lied to the local moneylender
to buy inputs al a higher price and sell his
output at a lower than market price. In the
process it is reported that as the households
have improved their economic position, the
demand lor consumption loans has declined.7
The other major achievement of the
successful programmes has been that the
poor arc able to ‘voice’ Co-operative
behaviour has become possible with
individuals’ repeated interaction, which
enables them to have a great deal of
information about one another. Thcchallenge
in our country in (he field of credit, as in
other fields, is to devise co-operative
solutions to problems without the
intervention of a coercive state.
Public Distribution System
Poor households spend nearly 80 percent
of their income on food. Therefore an
effective way of enhancing real income and
ensuring food security to poor households
is an assured delivery of adequate quantities
of foodgrains and other essential
commodities at favourable prices, i c. prices
which are lower than the market prices. In
India this has been attempted through the
public distribution system (PDS) since
second world war. Public distribution of
essential commodities gathered momentum
October 14-21, 1995
in recent years. Between 1971 and 1989. the
quantity of foodgrams distributed through
the PDS has increased four-and-a-half limes.
The ratio of release of foodgrains through
PDS to total foodgrains production has
remained around 10 to 13 per cent of an
expanding output base. Its coverage has
expanded regionally as well as in terms of
number of households. Probably because of
the public distribution system, inter-state
inequality in per capita consumption of
cereals has declined in the 1980s. in spite
of the fact that inter-state inequality in
production of cereals has increased?
A number of studies on the functioning
of PDS and accounts given by participants
in the PAP project have revealed several
weaknesses as well as strengths of this system.
Taking the country as a whole, the system
cannot be faulted for discriminating against
the rural areas, although its contribution to
the satisfaction of the foodgrains
requirements of poor households is not
substantial. Less than 16 percent of rice and
wheal and. even worse, less than 5 percent
of the coarse cereals (the staple foodgrain
of the -jGi > of the total quantities purchased
by poor households, arc obtained through
PDS The picture al the stale level is very
dissimilar. There are slates such as Haryana
where PDS was never designed as “an
instrument for ameliorating the rigours of
rural poverty” (Bhalla). For altogether
different reasons. PDS in Bihar also touches
the lives of the poor only marginally
(Sharma). On the other hand, there are stales
like Andhra Pradesh. Gujarat, Kerala and
Maharashtra where the PDS plays an
important role in ensuring food security to
rural households. Accessibility to the PDS
by the poor in rural areas of these slates was
much better than in many northern and the
eastern stales.
A well administered PDS can make a
significant contribution to (he welfare of the
common people. This is illustrated by the
experience in Kerala, where the PDS covers
approximately 95 percent of the population:
there is a pro-rural bias in terms of outlets;
there is a pro-rural bias in prices of the
commodities distributed through PDS; and
PDS is the main source of purchases of the
principal staple foodgrains by the poor.
Nearly a quarter of the lowest fraclilc group
purchased rice exclusively from PDS. The
same is the case, by and large, for sugar and
for standard clothes?
However, the success of PDS in Kerala,
as in Andhra Pradesh, is achieved al a huge
and unsustainable, cost to the public
exchequer. This is mainly because the states
seek to cover a large population, deliver a
large number of commodities, and keep
stable prices for these commodities. There
is confusion in the basic objective of the
system. PDS could be used as an instrument
for achieving any of the following objectives
2567
or a combination of these: rationing of
scarce commodities; stabilising prices of
essential goods by augmenting supplies;
providing effective competition to private
trade through alternative outlets for
distribution; and ensuring adequate supply
of essential items to vulnerable sections of
the population at reasonable prices. In our
present circumstances it is only the last
objective which can be effectively fulfil led
by PDS. as other objectives either place
severe strain on the bureaucracy which is
the principal agency for administering PDS,
or huge quantities of procurement or imports
of foodgrains would be needed involving
large sums of domestic or external resources.
Due to these attempts to achieve various
non-viable goals, the one achievable
objective, i e, ensuring adequate supplies of
essential goods to the poor, is also
jeopardised Progressively the centre and
the stales are realising the scope and
limitations of achieving food security through
this policy instrument. In spite of this
realisation, the coverage of the population
under PDS remains unwieldy and the number
•of commodities included are large and not
necessarily ‘essential* from the point of view
of poor households.
A serious objection to PDS has been
voiced, that due to PDS prices of commodities
in the open market would be higher than in
a situation where PDS is not operating. As
a consequence, the poor are the net losers
if they have to take recourse to the market
for the bulk of their purchases. The weighted
average price for purchases from PDS and
from theopen market would be unfavourable
to them The implication of this rinding is
not to dispense with PDS, but to enable the
poor to obtain all, or nearly all, of their
requirements of essential commodities from
PDS and to rely on the open market to the
least extent forsuchcommodities. A corollary
to this strategy is to discourage universal
coverage by the PDS.
The difficulty lies in targeting the right
population . A number of PDS schemes meant
exclusively for the poor - Andhra’s Rs 2 a
kg nee scheme is a classical example founder because it has not been possible to
target the benefits to the genuinely poor
households. The non-poor also get included
and coverage becomes too wide. This,
coupled with a fixed supply price, make the
draft on the state’s resources unmanageable.
The different methods of targeting (including
the income criterion, the location of the
household and the type of grains to be
distributed) have not succeeded in achieving
the objective. It seems that if PDS has to
be used as a device to contribute to the food
security of the poor, it may have to be linked
with employment generating programmesin other words, to make only workers on
public employment schemes entitled to PDS.
As a second best alternative, only (or mainly)
2568
the staple cereals consumed by the poor need
to be procured for and distributed through
PDS outlets. It was shown in the case studies
(Andhra, Kerala, Maharashtra) that the
reliance of the poor on PDS for coarse cereals
is marginal, whereas they could obtain a
sizeable proportion of their supply of wheat
and rice from PDS. The other handicap
which the poor face vis-a-vis PDS, which
prompts them to take recourse to private
traders, is the lack of credit to make the
purchases in bulk as are offered by PDS
outlets. The traders are prepared to sell
commodities in small quantities, and as
frequently as the customer desires, and also
to advance credit to their customers. The
PDS will also have to simulate similar
conditions. In particular, arrangements for
consumption credit will go a long way in
fulfilling the objective of PDS to assist poor
households
Evidence from a number of states suggests
that even with the existing limitations, the
availability of essential food items through
PDS has ensured equity in access to
foodgrains to a significant extent.
V
Targeted Programme for Poor
Providing Assets and Skills: 1RDP and
TRYSEM
The poverty problem is one of too small
a quantity of assets owned by the poor, too
low a volume of demand as well as supplies
while transacting in the factor and product
markets, and too low a market price for their
products and services due to high transaction
costs, attendant risks and institutional factors.
It is generally agreed that improving the
access of the poor to assets and increasing
the productivity of assets owned by them
is a viable strategy for poverty alleviation.
Redistribution of a major asset, land, has
been discussed in the earlier section. The
productivity of another major asset of the
poor, namely, their labour, can be increased
through investments in human capital
including skill enhancement. We begin with
an analysis of access to physical assets and
enhancement of the productivity of these
assets.
The survival base of a very large majority
of the rural poor continues to be agriculture.
They may own a small landholding and/or
work on others’ lands as agricultural labour.
In areas like Haryana where an ‘agriculture
first’ growth strategy has worked, even small
farmers have gained in income and output
terms. They have gained equally from public
investments in infrastructure and easier
access to factor and product markets (Bhalla).
This may not be true for other areas, c g,
Andhra Pradesh, where a majority of the
marginal farmers and agricultural labourers
arc outside the purview of state-sponsored
delivery systems (Parthasarathy). The lea,
desired scenario is presented by the exampp
of Gujarat where not only has agriculture
been deemphasised, but mismanagement q<
land and water resources has led tc
environmental degradation.
Schemes such as SFDA and DPAP havt
been designed to benefit both margins
farmers and landless labourers by
strengthening their activities in sectors like
agriculture, animal husbandry and other
allied activities. Similarly, marginalise^
groups were the main beneficiaries of th,.
Backward Area Development Programme
which was also to contribute to protectior
of the environment and ecologies;
regeneration. The experience of these
programmes has been far from satisfactory
(Hirway). It has been the general experience
that the assets distributed among the poo?
sections would be put to better use if the
infrastructure and market support is good.
Otherwise the returns to these assets could
not be assured.
Access to assets other than land - the
distribution of which as we have seen is
becoming difficult - could provide
additional income to the poor. A very wide
range of such assets can be listed. They may
include livestock, raw material for arts and
crafts for artisans, small implements or evei
a belter means of transport (a bullock can
or bicycle). In some cases these assets may
provide substantial income even to those
households which primarily depend on land.
The most important programme which it
aimed at providing additional income to th
poor by giving them productive assets of th
type listed above is the Integrated Rural
Development Programme (IRDP).
The casesludies reveal that IRDP has bee
successful in very special circumstances-;
where the asset and employment base of th
poor is less insecure. IRDP has done weE
mostly in developed and prosperous areas!
but its performance in backward and remott
areas has been poor (Hirway). Even in th
relatively prosperous areas, IRDP has
benefited those of the poor who arc ncarc
the poverty line. For the very poor th
scenario is mixed. In Gujarat, for example
those at the bottom have either not beet
reached by the programme or have not beet,
able to use the assets made available to then
productively (Hirway). However, in Andhrt
a good number of the very poor could retail
the assets given to them under the program^
and also show an appreciable increase is
income, though not to the extent that woul£:
enable them to cross the poverty lin£
(Parthasarathy). In Rajasthan, loo, because
of IRDP small and marginal farmers havj
done better than landless labourers (Sagarg
The same is true in Karnataka where thf
programme has benefited the poor who havt;
land, but not so much the landless port.
(Vyasulu).
Economic and Political Weekly
s
October 14-21. I99.\
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The strategy of IRDP has been questioned
on the ground that it is isolated from the main
growth process in terms of resource
allocation, technology as well as sectoral
development strategy. Il is not planned along
with other programmes of area or sectoral
development, it is a household based
programme, and the schemes are not
integrated with the development needs or
resource base of the area. The design ol the
schemes is also an important drawback as
they generally reflect inadequate financial
assistance for inadequately planned activities
(Kannan). Besides, IRDP expects loo much
in terms of the entrepreneurial capacity of
poorhouseholds(Hirway) The management
of IRDP has come under severe criticism
poor co-ordination among the multiple
agencies involved, and a major weakness in
the areas of finance and credit, marketing,
raw material supply, training, technical
assistance and follow up. Other limitations
are too much bureaucratisation and
centralisation in planning and imple
mentation of the programmes by the officials,
who have limited faith in implementing the
programmes; inefficiencies and corruption
at all levels; and lack of participation by the
people (Mirway).
A few suggestions emanating from the
case studies for improving the programme
are: a cash disbursement scheme which is
expected to minimise leakages (Sharma);
group approaches and integration of
beneficiary development for reaching
benefits to the poor (Parthasaralhy); Grameen
Bank type of credit disbursing agencies
(Vyasulu); the selection of beneficiaries and
implementation of poverty alleviation
programmes with the involvement of local
people, as in the Karnataka panchayati raj
institutions; and setting up of marketing
organisations to help micro-enterprises
(Kannan). To sum up. when a large-scale
transfer of assets to the poor is envisaged
through programmes like the IRDP, the
necessary backward and forward linkages
have to be strengthened and risks to the
households have to be minimised.
Another crucial aspect of asset distribution
is the development of skills to use the assets
productively. Capital investments in
improvement of the skills can be a major
step in poverty alleviation Similarly,
investments in the nutrition, education and
health of the poor enhance their capacities
for productive labour. One of the major
programmes for skill development is
TRYSEM. The objective of this programme
is to provide youth with some skills so that
they can be self-employed. None of the
states reviewed by the authors of the case
studies have reported success in TRYSEM,
and the basic reason is the absence of linkages.
especially with the demand system, i e, a
proper assessment of the opportunities where
the skills could be gainfully used. TRYSEM
Economic and Political Weekly
is neither linked with industrial policy nor
Generating Programme (RLEGP). These
with the rural industrialisation process. The
programmes were modified combined into
trades in which skills are to be developed
the Jawahar Rozgar Yojana (JRY) in
are identified on the basis of ad hoc
1989-90. In Maharashtra, through the
considerations. Frequently the skills imparted
enactment of the Maharashtra Employment
are of low levels. Since the needs arc not
Guarantee Act 1977 which has been brought
identified after any systematic review of
into force in 1979, the government has given
demand, the training does not always help
statutory support to the guarantee of
the poor to improve their levels of living.
employment, which has manifested in the
TRYSEM has failed to impart modern skills
Employment Guarantee Scheme (EGS).
for employment in the non-farm sector.
The extent of employment generated
Instead of supporting the mainstream
through these programmes in most of the
industrialisation process, it could al best
stales is not enough to enable a sizeable
support the informal residual sector (Hirwayj.
number of poor households to cross poverty
Tryscm is not well integrated with ongoing
line. In 1988-89 in Gujarat. NREP and
development programmes. To strengthen the
RLEGP together generated full employment
programme, better linkages in consultation
for 2 2 per cent of the poor, which is
with the agricultural university, krishi vigyan
equivalent to 100 days of employment for
kendras and voluntary organisations are
5.9 per cent of the poor. The employment
necessary There is a need to link up the
generation per beneficiary was around 30
programme more closely with the growth of
days per annum. Thus the programme had
the area (Parthasaralhy)
made no significant impact on the incidence
of unemployment in the state till 1988-89
Some relevant questions can be raised: Is
ii possible for trained rural youth to sustain as its size was too small compared to the
a .self-employment enterprise in a severely
needs. The average amount of wage income
competitive market with
the poor
received through the programmes have not
technological base that TRYSEM provides?
made much impact on the levels of living,
savingsoron assets of the families (Hirway)
How does he manage his credit needs? Is
Even the EGS scheme could eliminate
he creditworthy? What will make him
approximately no more than 7 per cent of
creditworthy - belter technology, or belter
unemployment among landless wage
organisational support? Who will provide
labourers in one year, namely, 1987-88. The
him with all this? The problems are more
estimates on expenditure show that (here
serious for the rural artisans Some successful
should be almost a 20 times increase in the
experiments in organising rural artisans in
EGS expenditure if unemployment has to be
non-farm sector projects with technological
removed through public works (Dev). Some
and organisational support from voluntary
micro studies indicate that the employment
agencies have been undertaken under the
provision of person days per person in a year
promotional schemes of NABARD.1"
varies between 25 to 160 days The share
Employment Generation; EGS and
of income from EGS for those employed in
J AW AH AR RoZGAR YoJANA
the EGS has ranged between one-third and
two-thirds. However this has only reduced
Wage employment programmes are
the intensity of poverty rather than achieving
expected io provide relief to the unemployed
success in terms of the number crossing the
poor and have an impact on aggregate
unemployment as well as on the labour
poverty line.
There are other instances which put the
market. They are also expected to increase
programme in a better light. For example,
labour absorption capacity through
in Andhra the employment generation
investment in durable and income generating
programme provided seven man days on an
public assets. They may also provide social
average per usually employed casual labourer
infrastructure such as school buildings. Such
in 1989-90. Assuming 45 days of
programmes can help in creating public goods
unemployment per casual labourer, the
and externalities, eg, through social forestry.
employment under JRY in a particular year
In this context some of the relevant issues
covered slightly more than 15 per cent of
are: the extent of employment generated and
the unemployment. This should be
its impact on unemployment and poverty
considered a significant creation of
levels; the level of wages and its impact on
employment (Parathasarathy). The person
the labour market; and the organisation of
day unemployment rale based on NSS data
the programmes. The other set of issues
declined considerably over lime in Andhra.
pertain to the nature of assets created and
In this state, poverty reductions have
whom they benefit.
continued despite a downward phase in the
Employment programmes were not
agriculture cycle. This is, presumably, due
perceived as major instruments of poverty
to the impact of rising expenditure on public
alleviation until the beginning of the 1980s
intervention programmes of which
in most states of the country. They were
employment programmes, contribute more
expanded in the Sixth Plan period under the
than one-third (Parathasarathy).
National Rural Employment Programme
In the above context, we are faced with
(NREP) and the Rural Landless Employment
October I4-2T, 1995
2569
The
Lakshmi Vilas
[©(OJUUL'X
F] A JJ
liuLSlo
Regd. & Admn. Office:
KARUR - 639 006.
EXCERPTS OF THE SPEECH DELIVERED BY SRI. G.V. RAO, CHAIRMAN,
AT THE SHAREHOLDERS MEETING HELD ON 15TH SEPTEMBER, 1995 AT KARUR.
DEAR SHAREHOLDERS,
I lake pleasure in extending you all a warm
welcome to this 68th Annual General Meeting.
Exchange business turnover at 271.32 crores in
BANKING SCENARIO
By the year 2000, the people of the world will
comparison to Rs. 226.18 crores in 1993-94.
Your bank recorded a voluminous growth in
I am extremely happy to address this august
be drawn much closer. This will result from
gathering fourth year in row, a notable event
genuine revolution in telecommunication,
repeated after a gap of almost two decades. The
transportation and expansion of international
Rs. 417.18 crores in 1994-95 from Rs. 214.37
Bank's Accounts for the year ended March 31,
trade, cutting acrossthe intercontinental contours.
crores in 1993-94.
1995, alongwilh Directors' Report have already
This development paves way for change in
As a SEBI classified category I Merchant Banker,
been circulated to you in advance.
the banking. The forces of change in the banking
the Bank has made giant leap by mobilising
ECONOMIC SCENARIO
It is four years since the Narasimha Rao
Government initiated economic reforms which
are globalisation, deregulation and technological
Rs. 1246.85 crores encompassing 325 capital
change and innovation. These forces crumbled
issues as compared to Rs 249.85 crores from
the edifice built over 2 decades by quality of
231 issues in the year before. Your bank plays
service rendered than on the.volume.
were aimed at regenerating confidence on India,
building the Foreign Exchange Reserves and
stimulating private investments, both domestic
and foreign. The liberalisation measures started
Investments by reaching an aggregate of
Banks are necessitated to adorn large capital
consequent on the requirement of Prudential
a dominant role, ranking second amongst the
private sector banks in India ...cording to Prime
Data Base by extending underwriting support for
199 capital issues covering an amounl of
Norms.
Rs. 2415.12 lacs as againsl Rs. 1956 69 lacs
yielding results from the second half of 1993-94.
With the emergence of new Banks in the private
With a sustained revival in the industrial activity
sector, the competition will be severe and at
coupled with a high level of agricultural production
times may lead to adverse conditions. Banks will
for the seventh successive season, the gross
have to choose a strategic position in which they
Mettur, Valasaravakkam, West Tambaram (T amil
domestic product in 1994-95 has risen by 5.6%
can build on their strength. The moot point will
Nadu), Chitradurga (Karnataka) and Gandhi
compared to 4.3% in 1993-94 and the Inflation
be accurate identification of the markets and
Nagar, Anand (Gujarat).
understanding and anticipating the customers
To enlarge the acceptability base of our credit
Rate was pegged down to 8.5%
The industrial sector witnessed remarkable
recovery after the lull trend noticed in the year
1993-94. The liberalised licensing procedures
and incentives have aided faster growth in exports
in spite of keener demand for various goods in
the domestic segment. The Balance of Payments
position has been highly comfortable, with foreign
exchange reserves rising to an all time high of
lor 192 capital issues in the year before.
The bank has opened 6 more branches viz.
needs. The most promising key to success in the
card, the bank has entered an arrangement with
retail market in the years to come will be the
Visa International.
strengthening of cost competitiveness.
The bank's emphasis is to employ advanced
In spite of the fact that the future Indian Banking
technologytothemutualbenefit of both customers
to be indeed exciting, challenging and highly
and bank and in line with it, our on-going
competitive, dynamic banking organisations with
investments are being made to enable the bank
a visionary leadership will profit immensely in a
Io render speedier service and also to sharpen
situation of this kind.
the Internal Control Mechanism.
20 billion dollars, in spite of stoppage of fresh
HIGHLIGHTS OF OUR BANK’S
In a Service Industry like ours, one of the
inflows by way of GDR issues.
PERFORMANCE
raw materials is human resources. Appreciating
With inflation getting well under control and
Your bank has earned a Net Profit of Rs. 18.32
favourable prices in the world market aiding
crores for the year 1994-95. The spurt in the
exports, the rupee can be stable against all major
profit strengthened the Reserves of the bank Io
currencies of the world. The liberalised corporate
reach as high as Rs. 41.33 crores.
its criticality, the bank is constantly training
its staff at various levels in the bank's own
Staff Training College as well as other
outside Institutions such as NIBM, SIDTC.
The Deposits of your bank touched a all time high
ACKNOWLEDGEMENT
provide the engine of growth and we should aim
of Rs. 1037.27 crores in 1994-95 from Rs. 584.39
a
I would like to thank the members and also 5
at double digit growth in GNP to address the
crores in 1993-94.
the Bank’s Staff and Executives for their <
remaining issues effectively.
Your bank has shown sustained growth in Foreign
dedicated service.
sector and the reforms carried out so far would
5
9
Not*: Thia do as not purport to ba th* proceadinga ol th* Annuli G*n*tal Maating of th* Bank
2570
Economic and Political Weekly
quesln
of lhe
for ext
>houk!
dilfcre
answer
of lhe r
in this
on lhe
One
lhe .st;
section
of mm
some
minim
con sen
where
inierlo
stale ii
of mir
market
minin
chai lei
is to c.x
of lhe
on mu
object i
itself i
whale'
a louis
This
conies
sponsi
Rajast
move i
famine
someo
Yojan.
insiaik
that gi'
would
to a fe
lor m.
The
.Mahai
havebt
level. '
rates u i
paying
wages
Some
be m.
covera
inopei
opcrati
There
season
than n
rise in
are obThe t
phcnoi
meniei
rate in
crops i
peasai
Pio ven
where i
October 14-21, |U95 Econo
questions such as what should be the extent
ineffective in influencing agricultural wages
of the programmes? What is the rationale
For example in Kerala the impact on the
for extending these programmes'? And how
rural labour market in terms of raising the
should the programmes be budgeted among
minimum wages, reducing cyclical
fluctuations in employment and reducing
different regions? These questions can be
the gap between men and women, is minimal
answered satisfactorily only in the context
of the respective slates. Some of the studies
(Kannan).
i
m this volume have attempted to throw light Another related problem is that of paying
minimum wages to rural workers. In Gujarat
Jon the issues raised here.
One of the important measures taken by
the stipulated minimum wages were not paid
;ihe slate in favour of the disadvantaged
in a majority of cases examined by the
sections is the institution and implementation
scholars However the Gujarat government
of minimum wages. There has always been
at its own initiative started special
I .some controversy about the impact of unemployment programmes known as ‘Zero
•minimum wages on the labour market. The
Unemployment District’ in 1990-91 and
consensus of opinion is around the view that
‘Minimum Unemployment Scheme’ in
where market imperfections are rampant and
1991-92, respectively. Some distinguishing
interlocking of markets not very uncommon.
features of these two programmes are that
state intervention in terms of the declaration
they arc restricted to carefully selected areas
jol minimum wages helps in rationalising
and that the households are carefully selected
market processes However, the rationale of
and divided into two categories, i e. those
minimum wages in rural markets is
going in for self-employment and others for
challenged on another ground. If the objective
wage employment. These programmes have
is to extend employment to as large a section
not been systematically evaluated so far
of the population as possible, the insistence
However it was found that the funds required
on minimum wages may detract from this
for zero unemployment in the selected
objective. On the other hand, if the state
districts were far loo large and the availability
itself is not honouring its legislation, for
of such funds did not seem likely (Hirway).
whatever reasons, the creditability of such
The employment programmes are not
a legislation is seriously impaired.
meant only to transfer income to the poor
This discussion is highly relevant in the
The objective is to create productive assets
•context of the employment programmes
or to strengthen the production base.
sponsored by the /states. The debate in
Quantitatively, the achievements in the
Rajasthan was manifested in a strong
generation of productive assets are too low
movement launched by the workers on
to make much impact. The primary objective
famine relief type activities in the state,
of employment generation gets neglected.
in most stales, as concentration is on assets
some of these covered by lheJawaharRozgar
Yojana. to obtain minimum wages. In many
that require morecapital.such as construction
instances government officials took the line
projects like panchayat ghar, housing, etc.
that giving minimum wages to these workers
These works benefit the rich more than the
would mean a trade-off between employment
poor. Works like soil conservation, minor
,i ) a few or the provision of a ‘safety net'
irrigation, watershed development and
lor many."
afforestation, which create more employment
There is a similar controversy in
presently and create opportunities for
■Maharashtra. In the EGS. the wage rates
employment in the future as well have been
have been kept more or less at the subsistence
neglected. Even in EGS. public pressure was
level. There is controversy regarding wage
tor construction of roads Only lately is the
rates under the EGS The dilemma is between
integration of EGS with schemes for
paying the minimum wage rate or the market
optimum utilisation of water, sericulture
wages (which are above minimum wages).
plantations, and dug wells for small and
■Some others argue that lower wages should
marginal farmers, being envisaged It was
■he maintained in order to have wider
pointed out. for example in the case of
coverage. In Andhra, minimum wages are
Andhra Pradesh, that greater emphasis needs
inoperative in most regions for most
to be placed on development of irrigation
iperations because market wages arc higher
and the efficiency of its use. In locating the
There is need for identification of areas and
programmes adequate wcightage is not given
reasons in which minimum wages are lower
to communities with poor waler base and
han market wages. Real wages are on the
dependence on low employment intensive
■ ise in Andhra Similar trends as in Andhra
coarse cereals (Parthasaralhyj. On the other
ire observed in some districts in Rajasthan.
hand, projects for creating private assets, c
The contribution of NREP to the
g, setting up dug wells for small and marginal
phenomenon of missing wages is comple
farmers, proved to be more successful.
mented by the increase in agricultural growth
One of the major failings of both the self
ate in some areas, a shift to labour intensive
help and the wage labour programme is a
.rops in semi-arid regions and the spread of
weak organisational base, including weak
Dcasant movements, e g. the naxalite
linkages between different programmes.
movement in Telangana. There are instances
Various studies point out the weaknesses
where employment programmes have proved
such as inappropriateness of the choice of
21. 1995 Economic and Political Weekly
October 14-21, 1995
projects, use of contractors, inappropriate
limings, higher material costs, and
unauthorised deductions by engineering
staff Generally, the implementing agencies
take up ad hoc projects and get lhem executed
at the minimum possible wages. Payments
to labour are inordinately delayed, thus failing
to provide immediate relief to the
unemployed. The shift from NREP to JRY
seems to have contributed to the involvement
of elected representatives and widespread
participation. The need for competent district
planning as a backdrop for employment
planning is yet to be fully met.
VI
Summing Up
The major programmatic thrusts for
poverty alleviation were more or less
common throughout our country. Strategies
and programmes were initialed by the central
government and were accepted by all the
stales. With a large degree of common
measures undertaken lo alleviate poverty,
the studies in this issue attempt to examine
why some stales have been more successful
in reaching this objective than others.
In a developing economy there are
essentially four ways by which poverty can
be alleviated The first is the ‘trickle down’
or the ‘spread effect’ of growth. It is now
well known that it is not the rate of growth
but the composition of growth which
determines the pace of the ‘spread effect’.
The pace is significantly affected by the
existence of infrastructure which helps in
the ‘trickle-down’ of the benefits ol growth.
But what is generally not appreciated is that
in order to receive the impact of growth.
poor households should have the capacity
lo respond to growth stimuli. Growth might
have created the opportunities, but if people
are not in a position to respond to these
stimuli poverty alleviation cannot take place.
What arc those conditions which permit
poor people to respond to these opportunities.
thus, becomes an important question.
The second approach lo poverty alleviation
is to create income earning opportunities for
the target group of the poor. The states
which could create not only employment
opportunities but also infrastructural facilities
lo sustain lhem had a belter record in poverty
alleviation. Equally important is access to
assets, understood in (he wider sense, to
enable poor households to lake advantages
of these various programmes. Poverty
alleviation measures like IRDP have made
some impact in a few states. But if we
examine the type of households that have
been able lo cross the poverty line, which
is the objective of these schemes, we find
that those households which are closer to
the poverty line, presumably the households
which had some assets to start with, have
been able to reap the advantages of these
programmes to a larger extent.
2S71
6 The estimate of poverty is as made by
poverty alleviation continues as one of our
Third, a policy on relative prices can
Mahendra Dev in his case study in this issue
important economic goals, irrespective of
influence the economic well-being of the
7 For a review of the Bangladesh experience.
the tenets of structural adjustment, emphasis
poor. The public distribution of foodgrains
see the World Bank working paper by Islam
on investment in these programmes has to
al lower than market prices, i e, dual pricing
et al (1994).
continue.
8 This finding is attributed to T N Krishnan as
of essential commodities, is the type of
presented by him in an unpublished lecture
(4) Larger investment in infrastructure has
measure which illustrates such an approach.
delivered on the same subject.
helped the states in their quest for poverty
Finally, the economy of poor households
9
This is not true for wheal and kerosene, for
alleviation even when the rale of growth
can be favourably affected by direct income
which middle fractiles depend more on PDS
in the state domestic product was low. This
transfers.In the developing countries there
This is because in the consumption pattern
was mainly because better infrastructure
are not many examples of direct income
of the poor these items do not figure
facilitated the ‘spread effect’ of growth.
prominently, and the higher income groups
transfers to the poor. Usually such transfers
take greater recourse to the open market to
bin
(5) Concentration of ownership of assets,
lake place indirectly, by ‘dual pricing’ for
obtain theses items.
which may reflect lack of access or
the essential products. Except in limes of
10
In one such scheme known as the Artisan °fl
inadequate access of the poor, is generally
natural calamity, and then also to a small
flu
Guild, traditional artisans have been exposed
associated with a slower pace of poverty
group of households, direct transfer of income
to new technology with the help of a voluntary
ha\
alleviation. But there arc a significant number
to the poor is the exception rather than the
organisation to produce commodities of an
identified and viable product line. For details
of exceptions. Based on available evidence,
rule.
see Bhargava (1994).
one can conclude that if the poor have access
ANC
It is not suggested that a country like India
11
At the Institute of Development Studies, case
to assets - to be interpreted in broader terms.
or the states within the country should opt
Jaipur, in a consultation exercise between
i
c. including skills and capabilities - there
for only one or the other type of measure
NGOs, policy-makers and some academics. and I
are belter chances for poverty alleviation
for poverty alleviation. Practically in all
there was a consensus ol opinion towards the rankc
even with slower economic growth.
states all these various approaches have been
end of the discussion that minimum wages of h
be paid to famine relief workers See perfc
(6) In some cases, as in Kerala, high
tried simultaneously. The first three
Gianchandani (1991).
investment in human development could
approaches, namely, growth inducing
durii
12 These findings were also reported in an earlier
compensate for slower economic growth,
measures, direct poverty alleviation program
Andi
paper by Vyas and Sagar (1993).
and could even negate the effects a skewed
mes and indirect subsidisation, have been
partL
References
distribution of physical assets.
practised with varying degrees of importance
whic
(7) In some rare cases, such as in Gujarat, All India Congress Committee (1948) Report const
attached to them. Why, then, has theoutcomc
a stale can make satisfactory progress in
differed from one stale to the other in such
of the Economic Programme Committee. lend |
poverty alleviation in spile of several
asignificanl manner? The significant lessons
New Delhi (inimeo).
of th
Bhargava, P (1994) ‘Role of Promotional impl
unfavourable factors, with more efficient
learned from the studies include:12
Organisations in Development of Non-Fann povc
implementation of PAP and involvement
11) Success in poverty alleviation efforts
Sector’, Working Paper Series, Institute of
of grass roots organisations in programme
was not significantly affected in our country
Th
Development Studies. Jaipur.
formulation and implementation.
by the professed political ideology ot the
Dev, Mahendra, S Suryanarayan and Kirit Parikh eval t
To conclude, the experience of several
ruling panics in different stales. Poverty
(1992): ‘Poverty in India: Issuesand Policies'. the n
Indian stales suggests that if the strategies
alleviation has been adopted as a legitimate
Asian Development Review, Vol 10. No I. socii
for poverty alleviation arc properly planned
political objective, and the poor as an
Dey. S K (1969): Power to the. People? A Chronicle and
and implemented, even without spectacular
important constituency, by parties of every
of India. 19-17-67, Orient Longman.
first
Dore, Ronald and Zoe Mars (cds) (1981): sock
economic growth or a major overhaul of the
colour and composition. This was mainly
Community Development, Croom Helm. proct
institutions and structures, the poverty ratios
because poverty alleviation efforts in our
London.
among rural households could be brought
country comprised ‘soft’ measures, e g, the
oullr
Gaiha. R (1991): ‘Poverty Alleviation
distribution of renewable resources,
down to a tolerable limit.
Programmes in Rural India: An Assessment*. poor
subsidies, dual pricing, etc.
Development and Change, Vol 22. pp 117-54. eval t
Notes
(2) Faster economic growth by itself does
Gianchandani. Deepak (ed) (1991) Minimum prog
1 Foradifferent view see Kohli (1987), wherein
Wages in Government Sponsored Rural seclinot guarantee a significant impact on poverty
the author emphasises the importance of the
Employment Programmes. Institute ol
alleviation. At the same time slow economic
prog
regime-in-power
to
explain
the
existence
of
Development
Studies. Jaipur.
growth is generally associated with low
popn
political capacity to initiate effective poverty
Islam.
R,
J
D
von
Pischpc
and
J
M
de
Waard
impact on poverty alleviation. Even with
secli
alleviation measures. He gives the example
(1994): ‘Small Firms Informally Financed:
faster economic growth targets of poverty
of West Bengal to prove his thesis. However,
Studies from Bangladesh’. World Bank inter
alleviation could be missed; with slow
as the case studies in this volume will show.
ful ut
Discussion Paper No 253, World Bank.
there are states such as Haryana or Himachal
economic growth there is little chance of
Kohli, Atul (1987): State and Poverty m India Pradesh where the political regimes could not
alleviating poverty.
The Politics ofReforms. Princeton University
be called radical and yet where, because of
(3) Practically all successful stales, i e,
Press.
the factors we have enumerated above, the
Minhas,
B S. R L Jain and S Tendulkar (1991):
successful in better performance on poverty
performance of PAP was better than that in
‘Declining Incidence of Poverty in the 1980s:
alleviation, have made sizeable investments
West Bengal.
Evidence and Artefacts’, Economic ana
in poverty alleviation programmes. This
2 The case studies of the selected states were
Th
Political Weekly, July 6-15.
prepared by G Parthasarathy. Alakh Narain
needs to be emphasised in the context of
in ll
Planning Commission (1993): ‘Report of tbe
Shanna.
Indira
Hirway.
Sheila
Bhalla.
Vinod
the recent economic reforms. One can easily
Expert Group on Poverty’ Government °f three
Vyasulu, K P Kannan. Mahendra Dev, Vidya
find instances when funds earmarked for
India, New Delhi.
J pron
Sagar and Biplab Dasgupta.
Vyas V S (1979): ‘Some Aspects of Structural
poverty alleviation programmes are not well
part
3 All these estimates pertain to year 1987-88.
Change in Indian Agriculture’, Indian Joitra1"
spent, or the funds arc not spent in a manner
the latest year for which detailed
(3) <
of Agricultural Economics, Vol 34. No Ithat ensures sustainable growth. But even
householdwisc consumption data are available
God.
Vyas, V S. and Vidya Sagar (1993): ‘AlleviaH°n
from NSS.
with a poor record in programme
soul I
of Rural Poverty in the Stales: Lessons of
4 For a detailed discussion on various aspects
implementation, generally (he states which
nortl
1980s’ in Kirit S Parikh and R Sudarsh3"
of methodology for enumerating poor
have invested heavily in programmes such
the i
(eds). Human Development and Structur"
households in rural areas, sec Planning
as IRDP or Jawahar Rozgar Yojana, or in
Of 11
Adjustment, Macmillan.
Commission (1993).
the earlier employment generation schemes,
5 The names in parentheses are those of the World Bank (1990); World Development Rep1"1
mill)
case study writers.
1990: Poverty. Oxford University Press
have distinctly better records. So long as
2572
Economic and Political Weekly
October 14-21. 1^
Ecot
CiOn-rt H „ 2)0. 2,0
Poverty Alleviation after Post-Liberalisation
- Study of a Tribal Block in Orissa.
Kishor C Samal
’
_
Chronic poverty and hanger remain serious problems in spite of economic growth. There are many approaches
to the problem of chronic poverty in developing countries. India has implemented various poverty alleviation
programmes. A study of these programmes in a tribal block in the state of Orissa shows that empowerment through
local democracy, land reform and education along with better credit delivery and growth of the rural non-farm
sector are necessary to help the poorest of the poor.
DEVELOPMENT at-the aggregate level
offers little relief to the poor. Growth is not
enough to eliminate ‘chronic’ poverty and
hunger. Public action is needed to eliminate
of starvation. For eliminating chronic hunger
and poverty, two broad strategies - growthmediated security and support-led security
-have been followedwhich have thecommon
feature of marshalling public action [Dreze
and Sen 19S9]. A combination of two the
strategies is desirable. It is important to dis
tinguish between ‘transient’ poverty due to
natural calamities, etc. and ‘chronic’ poverty
which implies starvation and malnutrition
and even death [Ravallion 1992].
I
Three Approaches in Developing
Countries
Though thereasons why pcopleare hungry
differ, there is no disagreement that poverty
is the root cause of ‘chronic’ hunger.. So,
there are various approaches to attack poverty
in developing countries all over the world
[Bardhan 1996: Fishlow 1996|. After the
publication ot World Development Report
19S0 [World "Bank 19S0J, attention turned
away from dealing directly with income
inequality to the task of reducing poverty,
primarly on the logic of need formorc direct
concern with the poorest of the poor and the
rural sector.
> .
'Basic needs ’ approach: One approach to
attack poverty is to give much moreemphasis
to various forms of massive public
intervention in directly improving health,
education and nutrition of poor. Initially, the
basic needs approach played an important
role to fight poverty and thereby hunger.
This approach, underlined in World
Development Report 1980, realised the
importa^e of separating general increase in
income not being spent on essential services
and variation in the ability of households to
spend wisely and effectively [Fishlow 1996;
World Bank 1980],
'Safety net’ approach: Another approach
relies primarilyon market-based growth. This
is emphasised at present due to the process
of structural adjustment and liberalisation.
"Jhis approach, known as ’safety net’ ap
proach, is popular in some multilateral
lending agencies like IMF/World Bank and
donor countries. Accordingto this approach,
1846
growth is to be determined by market forces
and then to takecareofthose who fall through
the cracks of the market process with targeted
public welfare programmes and the provision
of infrastructure. In fact, various studies [c g,
Edwards 1995; Green 1995] recognise that
poverty and inequality have actually wor
sened after the market reforms since the
1980s. So, there is a need of public inter
vention.
Besides ‘safety net’, other requirements of
poverty alleviation, according to World
Development Report 1990 [World Bank ‘
1990), are (i) labour-intensive growth in .
agriculture and (ii) emphasis~on primary
education and health. Education and health
emphasised in the ‘basic need’ and ‘safety
net’ approaches arc again brought into focus
in Human Development Report /997[UNDP
1997] which distinguishes between ‘income’
poverty and ‘human’ poverty.
Local authority andcommunity approach:
Ihcthird approach neitherdependson market
forces nor state patronage. It relies more on
local self-governing institutions and
.community involvement to improve the
material conditions and autonomy of the
poor. This is recently emphasised by Bardhan
(1996) and stated explicitly in Human
Development Report 1993 [UNDP 1993].
This raises the issue of capability of the poor
to organise their demands effectively and
continuously. This approach of World Bank
is based on the philosophy of self-help
underlying Grameen Bank of Bangladesh,
etc, and of effective decentralisation.
Alternative view of this approach is based
on Allied programme ofdemocratisation and
decentralisation in the post-war Japan
(Jannuzi 1994) and the practice and working
of panchayati raj institutions in West Bengal
[Dasgupta 1995].
Thus, over the years, improving the lot of
the poor has become an increasingly
important aspect of the World Bank’s
activities. Poverty alleviation is now the
central object of the Bank’s lending. Every
president since McNamara has:said that
poverty reduction is the Bank’s chief
objective. But the World Bank depends on
apd affects many other groups besides the
poor - the international finance market, the
taxpayers,' the politicians of advanced
countries, the governments of developing
countries, the contractors and consultants,
theprivatebanks, multinational corporations,
its present and past employees and last but
notthcleastthe bureaucrats ofthe developing
countries who work with it and wjto if they
are lucky go to work for it [Caufield 1996],
Though World Bank was set up with a pledge
to bring the third world into the Firs?, the
gap between the two worlds is wider than
ever after 50 years. The income ratio of the
US to developing world increased from J 6:1.
to 23:1 during the past 50 years [Caufield
1996], Thus, the past half-century of
development with theprescriptionsof World
Bank has not benefited the poorest people
nor the poorest countries. More than a quarter
of the developing countries’ people still live
in poverty as measured by human poverty
index {UNDP 1997]. - .
.
India is noexception to these trends. World
Bank is involved in the poverty alleviation
programmes in India particularly since 1980
through the loan from IMF/1BRD under the
structural adjustment programme. . .
II
Poverty Alleviation Programmes
A permanent solution to ‘chronic’ poverty
and hunger is different from lhe strategy
directed towards ‘transient’ hunger. In post
independence India, the relief system has
become more systematic and extensive to
combat [transient’ hunger occurring due to
drought, flood,'cyclone-and other natural
disaster. There has beenno major famine like
the Bengal Famine of 1943 after indepen
dence due to factors like major political
transformation, public pressure, increase in
real resources earmarked for relief, govern
ment intervention in food trade, food manage
ment [Dreze 1990a; Dreze and Sen 1990],
Recreation of lost entitlement through wage
based employment opportunities along with
unconditional relief have helped prevent
transient hunger to a great extent in India.
Though large-scale famines have dis
appeared in post-independence India, there
is persistence of mass poverty and ‘chronic’
hunger. Public action is also necessary to
fight ‘chronic’ poverty and hunger. There
has been attack on.‘chronic’ poverty in
different phases in India [Vyas and Bhargava
1995], In the first phase (1950s to 1960s).
major emphasis was on redistribution of
Economic and Political Weekly
July II, 1998
non-rcnewable resources such as land reform.
Then, from the late 1960s, target grouporientcd approach was practised for creating
employment opportunities and distributing
renewable assets among thepoor. In the third
stage, starting fromthe early 1990s, emphasis
was given on measures aimed at accelerating
economic growth and creating an environ
ment for ensuring a 'spread effect’. On
this broad framework, practically in all the
states, various methods have been imple
mented simultaneously. But the outcomes
of the programmes are different across the
states.
Huge amounts of money have been spent
on various rural development programmes
suchasIRDP,JRY,IAY,MWS,EAS,GKY,
DWCRA, TRYSEM, DPAP, DDP, RWSS,
NSAPand others. But the major programmes
have continued to suffer from deficiencies
of incorrect identification of beneficiaries,
the leakages of benefits and inflation of
mandays ofemployment generated. The li mits
of India’s anti-poverty programmes centre
on two explanations [Ray 1997], The first
highlights bad implementation as the main
cause of anti-poverty programmes not
reaching the poor. The second explanation
emphasises the absence of structural change
in society. It is argued that the poor may not
gain the fruits of development unless there
is a radical change in the social structure.
Ill
Poverty Alleviation in Orissa
in the district. However, there have been
some changes in the situation during the last
10 years mainly owing to public pressure.
The capacity of individuals to withstand
drought at present is higher than what it was
10 years back.
In Orissa, various measures and program
mes toeradicate ‘chronic’ poverty and hunger
have also been implemented, (i) in agriculture
through consolidation of holdings, supply of
inputs, marketing of agricultural products
and extension of irrigation, etc, (ii) in allied
sector through plantation, dairy, poultry,
piggery, horticulture,and vital infrastructure
such as milk chilling plants and collection
and marketing of milk and milk products;
(iii) in rural non-farm sector through PMRY,
DPAP,etc, (iv)in population control, through
family planning programme and special
benefit to green card holders; (v) in targeted
programmes for poor through IRDP,
TRYSEM, DWCRA, JRY, IAY, EAS, OAP
and others; (vi) in health sector through
mobile health services, ICDS, etc; (vii) in
education through mid-day meal scheme,
residential high school in every ITDA block,
TLC, DPEP andothers, (viii) in infrastructure
through provision of road communication to
every village, w'ater and electricity provision
to SC/ST households at a concessional rates
and (ix) various other measures in rural areas.
No doubt these measures have an impact
in reducing the intensity of poverty in the
state but the rate of reduction is, in fact,
slower in Orissa compared to other states
like Andhra Pradesh, Gujarat, West Bengal
and Kerala. Thus, many programmes were
launched in the state but unfortunately they
have not shown any impressive result. It is
sad to note that after 50 years of independence,
Orissa endowed with vast natural resources,
is still the second highest state in India in
respect of poverty ratio (48.4 per cent as per
the Lakdawala Committee Report). Some
blocks in Orissa typify in many respects the
limited success of various uncoordinated
and unimaginative policy measures. People
in thescblocks havesuffered dueto peripheral
location, constant neglect, multiple
deprivation and exploitation through outside
traders, local feudal elements, power brokers
and the state bureaucracy [Samal 1994].
Thcrearcalso leakages inthe implementation
of the targeted programmes for the poor.
Some of these phenomena are also prevalent
in Laikera block of Jharsuguda district
(formerly in theundividedSambalpurdistrict)
where about 84 per centof families arebelow
the poverty line (as per the 1995-96 survey,
Government of Orissa).
IV
Tribal Block of Laikera
There is a need for extensive and compre
hensive study of Laikera block to know
whetherdifferent rural development measures
undertaken by the government have reduced
the extent and intensity of poverty in the
block and to find alternative measures. The
present study covers the tribal dominated
Laikera block, a backward block in the
western part of Orissa. Laikera, the block
headquarters is located on the JharsugudaBamara District Main Road, 26 kms away
from the district headquarters Jharsuguda
towards the north and 399 kms from thestate
capital Bhubaneswar. The block is divided
intoeight gram panachayats (GPs) consisting
of 45 revenue villages. More than half of its
total population is scheduled tribes and 18
per cent scheduled castes, higher than in the
districtand thestate. As per the 1991 Census,
22, 206 persons or around 53.18 per cent
of the total population of the block are
workers. Around 38 per cent of them are
cultivators and 28 per cent agricultural
labourers. The net agricultural land in the
block is 72.79 per cent in ,1995-96 which
is comparatively higher than the district and
the state figures. However, the percentages
of both net and gross irrigated areas (10.17
and 15.83 per cent respectively) are much
lower than that in the state. The block is
industrially backward as it has only four
small-scale units employing 16 people with
an invested capital of R? 3.13 lakh.
There is also regional disparity within the
block. Three GPs. viz, Pakelpada. Tileimal
and Babuchipidihi consisting 22 villages
located in the northern part of the block are
Rood, cyclone in coastal belt and drought
inthe western part and consequent 'transient'
hunger -occur at regular intervals in Orissa.
Though, severe flood may lead to ‘.transient’
hunger forashortspell, sometimes, the people
of coastal belt do not dislike its occurrence
since it gives a chance to get relief without
work and to earn through manipulation due
toleakages from relief and construction work
for repairing damage. The people in this belt ■
are politically conscious and well organised
and can put public pressure on the government
for relief in spite of its leakages which are
shared by politicians, bureaucrats and trader
contractors.
But this is not the case in the western part
Table: Distribution of Sample Beneficiary Households on the Basis of Income
of Orissa particularly the undivided districts
(Nm)
of Kalahandi, Bolangir and some parts of
MWS
Annual
Income
IRDP
DWCRA
MADA
Sambalpur. The Kalahandi district in Orissa
Before
After
After
Class (Rs)
Before
After
Before
After
Before
has attracted world attention due to its recur
(2)
(6)
(8)
(9)
(3)
(4)
(5)
(7)
(1)
ring droughts and consequent poverty, hunger,
2
I
2
1
Upto 3500
3
1
out-migration, outbreak of serious diseases
7
4
4
3500- 6400
16
19
6
5
6
and in some cases distress sale of children
4
4
6400- 8500
16
4
4
6
18
5
[EPW 1985;Mishraand Rao 1992;Pradhan
6
4 .
5
8500- 11000
15
16
5
5
3
1993: Sama! 1994], Some programmes such
6
—9
16
2
12
2
Above 11000
3
3
as Drought Prone Area Programme (DPAP),
24
24
17
17
Total
66
66
18
18
Area Development Approach to Poverty
(8822)
(9959)
(9228)
(8650) (8668) (7479) (8487) (9441)
(ADAPT) and others were launched to comNiites: i) Figures in brackets show the average household annual income in Rs.
batdroughtand consequent ‘transient’ hunger
ii) Income is expressed at 1991-92 price.
in the district. But these have not been
iii) ‘Before’means before assistance representing the year 1991-92. .
sustained and drought recurred in 1993-94
iv) ‘After’ means after assistance representing 1995-96, the survey year.
relatively more backward. So. these panchayats arc termed ‘north region' and the
others GPs (viz. Laikera, Kulemura,
Sarangaloi. Bhatlaida, and Sahaspur) arc
designed "south region’. Around 68 per cent
of the total population of the north region
are scheduled tribes compared toonly around
42percent inthesouth region.The percentage
of total families living below poverty line
iscomparatively higher at 86.32 in the former
than at 82.54 in the latter. The north region
is socio-cconomically backward compared
tothesouth region. An additional programme
called Modi fied Area Development Approach
(MADA) has been implemented in the north
region as it is declared the most backward
tribal area.
assistance to Rs 9,228 after the assistance
implying negative effect of the IRDP pro
grammes’ (Table). The extent of poverty and
intensity of poverty have also increased as
the average family income has not only remai
ned below the poverty line but also declined
by 7.34 per cent after the assistance under
IRDP. Only around 6 per cent of sample
beneficiaries have crossed the poverty line.
The increased intensity of poverty is further
observed in the block as the modal income
class has shifted towards lower income
bracket from Rs 6,400-8,500 to Rs 3.5006,400 (Table).
2
MADA
Modified Area Development Approach
(MADA)has been implemented in thcblock,
V
particularly in north region since 1985 to
Methodology
achieve objectives similar to IRDP exclu
The study covers all the eight gram pansively for the tribals. But neither have the
chayats of the block covering 180 benefi
physical targets been achieved nor have the
ciaries of different government sponsored
available funds have been fully utilised during
development programmes,The technique of
1991 -92 to 1995-96. The average income of
sample MADA beneficiaries has increased
'stratified simple random sampling’ without
replacement and ‘purposive’ sampling are
marginally from Rs 8,650 before the
assistancetoRs8,668.aftcrassistance remains
used for the selection of villages. The
technique of ‘simple random sampling’
below the poverty line (Table). The income
distribution afterthe assistance is against the
without replacement is also followed for the
poorest of the poor since there is increase
selection of beneficiaries. The sample bene
ficiaries constitute around one-fourth of the
in coefficient of variation of income. The
total beneficiary population of different
extent of poverty has also not declined as
none has crossed the poverty line. In case
government programmes from 1991-92 to
of M ADA beneficiaries as a whole, ourstudy
1995-96. The total number of sample bene
ficiaries covered in the study are 66 from
shows no reduction i n the i ntensity of poverty
and (i) unchanged modal income class, (ii)
IRDP. 18 from MADA, 17 from DWCRA
and 24 from MWS. The villagewise
marginal increase in average income from
beneficiaries of different programmes are
Rs8,650 to Rs 8,668 (Table), and (iii) increase
selected on the proportionate basis. The study
in coefficient of variation of income (from
is based on both primary and secondary
42.37 to43.32). The performance of MADA
sources of data. Primary data are collected
in generating employment is insignificant
by canvassing structured questionnaires, one
sinccchangeinaveragemandayscmployment
for the households, and the other for the
(60 per cent) and fall in its coefficient of
villages. Reduction in the ’extent of poverty’
variation (from 54.76 to 5434) after the
is measured by finding out the percentage
assistance arc negligible.
of beneficiaries crossing the poverty line'
The selection of beneficiaries is made out
after the assistance. Measurement of reduc
of the identified scheduled tribe group from
tion in "intensity of poverty’ is made with
the target group identified for IRDP. But the
the help of statistical tools like (i) average
very basis of identification is faulty. Around
income, (ii) modal class of income distri
45 per cent of sample MADA beneficiaries
bution, and (iii) coefficient of variation.2 The
have been selected from above the cut-off
coefficient of variation is also used to
point of Rs 8,500 and around 17 per cent
measure the degree of inequality in income
from above the poverty line. It is found that
distribution among the beneficiaries after the
in around 61 percent cases, the assisted assets
assistance. The present paper deals with the
are not in running condition. The transaction
major rural development programmes
cost of the credit is more than Rs 500 per
undertaken in Laikera block.
MADA beneficiary for his loan. Though
stipulated subsidy under MADA is 50 per
VI
cent,'it is found that only around 35 per cent
Assessment of Existing Programmes
subsidy has been provided. As a whole, the
impact of MADA on tribal is marginal and
1 IRDP
has not brought any visible change in their
The average annual income at constant
level of livingsincc it has not taken the major
price (at 1991-92 prices) of the sample
local resources like MFP/NTFP with which
household beneficiaries under IRDP has
tribals are well acquainted intoconsideration
declined from around Rs 9,959 before the
for their development.
1848
3
DWCRA
Development of Women and Children in
Rural Areas (DWCRA) has been imple
mented in Laikera block since 1985. Around
735 women of'45 target women groups
benefited through this programme. There is
no reduction in the extent of poverty of the
sample beneficiaries though their average
family income has increased by around 13
per cent. Moreover around two-thirds of the
beneficiaries are still lying below the cut
off line of Rs 8,500. On the other hand, there
is reduction in the intensity of poverty since
the modal income class (Rs 6,400-Rs 8,500)
. remained unchanged and there is increase in
average family income from Rs 7,479 to Rs
8,487 (Table). But the increase in coefficient
of variation of income from 34.05 to 94.61
indicates the growing incomedisparityamong
the beneficiaries. In 42 per cent of cases, the
beneficiaries have not continued activities
assisted under DWCRA scheme, most of the
others are not interested to continue them
which might bedue to factors such as (i) one
type of activity (viz ’dhan kuchuni’) assisted
for all the beneficiaries, (ii) irregular
availability of raw materials, (iii) low profit
margin, and (ivjavailabilityofmorc profitable
alternative source of income like ‘sal’ leaf
plate making. This raises the issue of employ
ing people in the activities in which local
resources can be utilised optimally and in
which they are skilled or well acquainted
instead of forcing them to carry on a new,
unknown type of job.
4
JRY, MWS
The available funds have not been fully
utilised under Jawahar RozgarYojana(JRY)
and the percentage of its achievement is
comparatively lower in Laikera block com
pared to that in the state. The study reveals
that the mandays of employment .per
beneficiary household through JRY is only
about 17 days constituting 6.51 per cent of
the total employment from all sources which
is far below the stipulated 100 days of
employment per family. The relevance of.
Million WellsScheme(MWS),asub-scheme
of JRY in dry area like Laikera block is well
recognised. But neither are the available
funds fully utilised nor the physical target
achieved. Similarly neither the extent of
poverty nor its intensity has declined after
the assistance under MWS. Rather, around
13 per cent of sample MWS beneficiaries
have came below the poverty line indicating
the increase inextent of poverty. The decline
in average income by around 6.55 per cent
and backward shift of modal income class
are also observed by our study (Table). But
the average income of large landholding
beneficiary class has increased significantly
while that of both SC and ST beneficiaries
has declined. The fall in average income of
. Economic and Political Weekly
July II, 1°9S
the sample beneficiaries maybe due to various
factorssuchas(i)utilisationofwellsprimarily
for drinking water and other non-irrigation
uses and (ii) production of one agricultural
cropfviz, chilli) by all the MWS beneficiaries
and lack of adequate demand for it in the
local market.
Thus all these rural development pro
grammes in the block have failed to achieve
their primary objectives, viz, alleviation of
poverty. The study observes that the extent
and intensity of poverty have not decreased.
Increasing poverty is also reflected through
the numberof families living below poverty
line which has increased from 80.73 per cent
in 1992 to 83.82 percent in 1995-96 in the
block in spiteoftheimplementation of various
poverty alleviation programmes. Moreover,
there is no visible difference between the
level of living of the beneficiaries and that
of the non-beneficiaries. The greatest lacuna
of these programmes is that most of the
beneficiaries think that the assistance is a
form of relief and each and every problem
should be solved by the government. We
have identified some ‘thrust’ areas for the
development of Laikcra block such as two
minor irrigation projects, vegetablc/spice
cultivation to catertoSambalpur-JharsugudaRourkela industrial belt, rural non-farm
activities, particularly ‘sal/siadi’ leaf plate
making, etc. However, the suggestions and
measures forparticularprojects, etc, areshortterm solutions. For a permanent solution to
eradicate poverty, there is need .of an
alternative policy prescription not only for
Laikera block but for all the blocks in the
state of Orissa.' *
VII
.,
The Alternative
Self-employment programmes along with
other programmes relating to wage employ
ment. infrastructure development and social
security havean impacton economic activities
in rural areas by pumping large amount of
money into it. Self-employment programmes
like IRDP, etc, are concerned with three vita!
aspects, viz, (i) type of activity, (ii) credit
delivery, and (iii) skill. However, the impact
is not impressive though the programmes
have been implemented for a long period.
The major considerations for policy-makers
to alleviate poverty and eradicate hunger
should be: What activities are to be under
taken? What will be the system of credit
delivery? How the skill and productivity of
the workers can be developed so that they
can take new modern jobs.
Wage employment programmes should be
treated as a temporary measure particularly
during natural disasters. Fixation of minimum
wage at optimal level by the government and
its proper implementation by government
agencies and organisation of poor seem to
be more important than the wageemployment
Economic and Political Weekly
programmes for alleviation of poverty and
eradication of chronic hunger. Self-employ
ment schemes which will provide employ
ment to wagc/hired workers arc likely to be
better. But, in what activity is it to be en
couraged and how will it be implemented?
This brings the role of non-farm sector in
rural areas into focus for solvingtheproblcms
of poverty, hunger and unemployment.
in consequence, have a socio-psychological
impact on poor agriculturists (Dasgupta
1995]. This, as a result, may help them to
remove psychological barriers for bargaining
higher wages and for participation in local
level institutions and organisations. Theother
beneficial by-products of land reforms are:
(i) change in the local political structure in
the village, (ii) more ‘voice’ to the poor
inducing them to get involved in local self1 Rural Noh-Fann Sector (RNFS)'
governing institutions and in common mana
gement of local public goods [Bardhan 1995],
Since the agricultural sector in the rural
areas is saturated, the growth of RNFS is for‘ (iii) more efficient functioning of local
markets for farm products, credit, water, etc,
creation of sustainable employment. In fact.
when the leveling effects of land reforms
there has been growth of employment in
improve competition and make it more diffi
RNFS in Orissa. The RNFS workers as a
cult for the rural oligarchy to comer markets
percentage of rural main workers grew from
12.1 per cent in 1961 to 14.^ per cent in
[Bardhan 1996] and (iv) shift from rentier
1971, 15.8 per cent in 1981 and to 17.5 per
to entrepreneurial agriculture [Parthasarathy
1995],
cent in 1991 [Sama! 1997b, 1997c]. Employ
Redistribution of land and rural assets
ment in RNFS in the state grew at the rate
without decentralisation of power or local
of 2.8 per cent per annum during 1981-91
while the number of rural main workers grew
support system would produce even greater
dependency, insecurity and instability. The
by 1.7 per cent per annum.
land reform in post-war Japan was carried
Some scholars have advanced various
out in the context of Allied programme of
hypotheses on the factors affecting the growth
democratisation and decentralisation which
of RNFS such as inter-linkage hypothesis
included strengthening local self-government
[Mellor 1976], residua! sector hypothesis
[Basant 1994]’, urbanisation hypothesis
and extensive system of independent local
co-operatives to provide an effective financial
[Kundu 1991] and equity hypothesis [Samal
and informational agricultural support
1997b]. The equity hypothesis postulates
system. Thus, land reform per se is less
that the equal distribution of land and rural
assets including water for irrigation and
important than genui nc democratic decentra
lisation [Janntizi 1994]. To implement land
common property resources (CPR), instead
reform, state i ntervention along with effective
of subsidisation of mechanisation of
involvement of the intended beneficiaries
agriculture, and expansion of primary and
over a long period of time is neccessary
secondary education rather than subsidisation
which is possible through pressures generated
of higher education may help the growth and
expansion of RNFS activities through
by organisation of poor [Kannan 1995], But
matiy politicians and bureaucrats regard the
consumption-expenditure linkages by
increasing rural income and bringing more
political prospect for land reform as bleak
even distribution of such income. From our
and therefore drop it altogether from the
study on RNFS in Orissa [Sama! 1997b], we
agenda of poverty alleviation’ Some aspects
observe that even distribution of land, and
of land reform such as security of tenure by
RNFS activities are positively related. Our
legalising tenancy through recognition of study further shows that districts with high
tenants by government authority through .
literacy rate have comparatively larger
wri tten record/purcha may be easier to imple
percentage share of RNFS workers in rural
ment than others [Bardhan 1996]. This is
main workers. Education and literacy help
possible by continuous public intervention
in increasing the productivity and skill of
as well as movement by organisation of poor
workers, which, in turn, stimulate thegrowth
to force the government to implement it. Side '
of modern informal RNFS with new
by side, the decentralisation of power and
technology. To alleviate rural poverty and
empowerment of local level institutions and
unemployment, thegrowth of RNFS through
organisations like gram panchayats and
diversion of workers from agriculture is
i ndependent co-operatives are a must to make
desirable. It is possible by (i) effective land
it a success.
reform measures and (ii) spread of primary
3
Education,
Health
and Skill Development
and secondary education.
Educational attainment and literacy affect
2
Land Reform
positively efficiency in resource allocation
Land distributed to poor through land
leading to higher income and more equitable
reform may not be sufficient to make the
distribution of such income. However, this
beneficiary self-sufficient. However, the
equity effect depends on the level of
objective of land reform to curb land mono
schooling. Basic and primaty education has
poly and indirectly stopping the process of
the highest impact on distribution of income
proletarisation can be fulfilled which will.
favourable to equity while equity impact of
July 11. 1908
expansion of post-graduation may actually
be negative [Psacharopoulos 1988]. As men
tioned earlier, primary and secondary educa
tion help the growth of RNFS not only through
consumption-expenditure linkages by
bringing about less uneven distribution of
income in rural society but also by helping
in skill formation and in improving labour
productivity. However, malnutrition in early
childhood hampers school performance.
Better nourished children perform better in
schools. Prolonged childhood malnutrition
can impair mental development which
occures largely in the first two or three years
of life. So. there is need to ensure that chi Idren
and their mothers receive adequate amount
of nutrients and balanced food and proper
health care services. Therefore, expansion of
school education and health care facilities
for increasing the access of the poor to these
services are very much essential for overall
improvement of skill and productivity of
workers.
4
Credit Delivery
Increased access to land and rural assets
through its even distribution and toeducation
and health services cannot be fully utilised
without access to formal credit system. Access
to formal/institutional credit helps in poverty
alleviation by enhancing the income of the
poor, by reducing interest cost and reducing
the dependence of the poor on informal
creditagents [Parthasarathy 1995]. However,
the formal credit sector in rural areas does
not serve all the potential borrowers. The
left-out borrowers are served by lenders in
the informal credit sector. Rural credit sector
has been at the centre of policy intervention
in developingcountries including India over
the past 40 years. The role of institutional
finance of the formal credit sector in the rural
economy has been enhanced with the strategy
of (i) expansion of institutional structure,
(ii) directed lending and (iii) subsidised
credit. Subsidised credit has been advanced
mainly under poverty alleviation program
mes. It is claimed that due to these steps,
the relative share of the formal credit sector
in total cash debt of the rural households
increased from 7.1 percent in 1951-52 to
61.2 per scent in 1981. But very negligible
portion of cash debt of rural households
living below poverty line is from formal
financial institutions [Samal 1997a].
The past40 years of experience of govern
ment intervention in rural credit market
through rural financial institutions has failed
to drive the traditional informal credit sector
agents out of the market. The other important
featuresof rural credit market are: (i) speciali
sation of formal financial institutions in areas
where fanners have title to land, (ii) low
outreach of formal rural financial institutions
to people due to absence of collateral on
account of improper land records to prove
title to land and (iil) greater accessibility to
informal credit sector due to acceptance of
moveable property like gold.'silver, utensils,
consumer durables, etc, as collateral [Beslcy
1994; Hoff and Stiglitz 1990; Samal 1997a;
Samal and Rath 1997] Rural financial
institutions in India have many things to
learn from the policies of informal credit
sector lenders at least for advancing loan and
enforcing repayment. They should leam from
the working of successful rural financial
institutions in Asia not only for advance and
repayment of loans but also for mobilisation
of household savings in rural areas [Samal
1997a; Yaron 1994]. The major policy alter
native. as is observed from the working of
successful RFls is that thereis need ofservices
of loan advances at the doorstep of small and
marginal farmers and rural non-farm sector
entrepreneurs. In this respect, co-ordination
with self-help groups (in the form of
independent co-operatives) is desirable.
, In Orissa, it is observed from one of our
studies [Samal 1997c] that the small and
marginal fanners and small RNFS entre
preneurs need adequate and timely credit but
not necessarily at a concessional rate of
interest. They may even be ready to pay a
higher than normal market rate of interest
since they usually procure their loan at hefty
rates of interest in the informal credit sector.
But directed lending has focused on low
interest rates and subsidies rather than
availability and accessibility of credit. The
main problem of credit delivery system is
not the supply of credit at concessional rate
or with subsidy (except, of course, at the time
of harvest failure but access to credit and
timelycreditinadequateamountat reasonable
rateof interest. Other important factors which
may make lending policies successful arc;
(i)codificationofpropertyrights.(ii) develop
ment of complementary institutions like
insurance market, and (iii) legalising tenancy
through recognition of tenants by thegovernment. A single rural financial institution in
the country may be considered which will
both mobilise savings and disburse loans in
rural areas to check outflows.
5
Local-Level Institutions
Poverty alleviation programmes usually
develop fromoneof two approaches: techno
cratic or institutional. The technocratic
approach rarely refers to non-govemment
organisations (NGOs) while the institutional
approach considers them essential for
alleviating poverty in developing countries
and as a substitute for i ncfficient governments
in delivering services to the poor [Besley
1997],
With the encouragement of World Bank
and donor countries. NGO activities are
growing in the world. Major concerns of
NGOs were health care and education in the
1950s and 1960s, empowerment in the 1970s
and gender and environment in the 1980s
[Riddell and Robinson 1997]. The emphasis
ison’sustainabledcvelopment’in'thc 1990s.
But most of the projects of NGOs fail to
reach the poorest of the poor and intervention
by them is costly to implement. Moreover,
most of the projects seldom continue after
the withdrawal of NGOs from it. A realistic
cstimateofnumberof NGOs actively engaged
in rural development in India would be in
the range of 15,000-20,000. The amount of
foreign funds coming into India for use by
NGOs each year is around USS 520 million
which is equivalent to approximately 20 per
cent of official aid flows [Riddell and
Robinson 1997]. Around a sum of Rs 600
million is provided by the government
(through CAPART) and Rs 400 million by
individual and corporate donations to NGOs
in India. But managerial competence and
technical expertise of the NGOs in India are
often weak. In some cases, their role is dubious
and they are more corrupt than government
agencies. The NGOs lack continuity and
they often work in isolation from and some
times in opposition to one another. Many
depend heavily on external funding agencies
of foreign countries, for which, sometimes,
some of them play the role of an institution
of neo-colonialist forces' in this era :of
liberalisation.
■
The NGOs are generally reluctant to
divulge detailed accounts. NGOs are not
accountable to the public for any project/
activity undertaken by them while the
government is responsible and accountable
to the people through periodic elections. But
undertaking project and spending on it
without accountability is against the norms
of a democratic society. Of course, when the
government spends a significant portion of
its budget on anti-poverty programmes, very
little reaches the real poor because there is
no organised pressure from the intended
beneficiaries [Bardhan 1996]. Secondly, the
programmes are administered by a distant,
unco-ordinated and inefficient bureaucracy
notaccountable to the local poor. Finally, a
disproportionate share of the benefits goes
to resourceful, manipulative persons/beneficiaries with connections and to the large
army of middlemen, contractors, officials
and politicians. If the government at the top
is not efficient, there is need of decentralisa
tion of power with developmental functions
of rural areas rested with local level institu
tions like gram panchayats.
Of course, there is fear that local level
institutions are invariably dominated by
vested interests who are not interested in and
even hostile to progress which benefits mainly
the poor and underprivileged [Rao 1994],
It is true that structural changes arc essential
conditions to ensure the rise of rural poor
to a position of dominance in the local level
institutions. This is possible, as mentioned
Ecr»nor"'e and Political Weekly
July 1), 1998
among the beneficiaries remains unchanged or
‘Introduction: Imperfect Information and Rural
shifts to the higher income brackets and/or,
Credit Market’, The World Bank Economic
there is, in general, a movement of the
Review, Vol 14, No 3, September, pp 235-50.
beneficiaries from the lower to the higher
Jannuzi, FThomasson (1994): India's Persistent
income brackets, then it implies that there is
Dilemma: The Political Economy ofAgrarian
a reduction in the intensity of poverty of the
Reform, Westview Press, Boulder.
beneficiaries. An increase in theaverage income
Kannan, K P (1995): ‘Declining Incidence of
of the beneficiaries along with no change or ! ' Rural Poverty in Kerala’, EPW, Vol XXX. No
a decrease in coefficient of variation implies
41 and 42, October 14-21, pp 2651-62.
a reduction in intensity of poverty of the
Kundu, Amitabh (1991): ‘Growth of Nonbeneficiaries having an income less than the
Agricultural Employment: A Hypothesis on
average income of the beneficiaries as a whole
Rural-Urban Linkages. IASS I Quarterly,
(i e, lower income group beneficiaries). An
Vol 10, No 2, October-December.
increase in coefficient of variation after
Mellor. John W (1976): The New Economics of
assistance implies an increase inequality in
Growth: A Strategyfor India and Developing
World, Cornel University Press, Ithala,
income distribution among the beneficiaries.
3 ‘Before assistance’ refers to the year 1991-92 Mishra Dcepak and R S Rao (1992): ‘Hunger in
and ‘after assistance’ refers to the year 1995-96.
Kalahandi: Blinkered Understanding’ EPW,
Vol XXVII, No 24 and 25, pp 1245-46.
4 In the background paper for the World
Parthasarathy, G (1995): ‘Public Intervention and
Development Report 1995, RNFS is defined
Rural Poverty: Case of Non-Sustainable
as the sector which includes all economic
Reduction in Andhra Pradesh’, EPW,
activities in rural areas except agriculture,
livestock, fishingandhunting. Fordetailsabout
Vol XXX, No 41 and 42. pp 2573-86.
6
Organisation of Rural Poor
Pradhan, Jagadish( 1993); ‘Drought in Kalahandi:
the concept of RNFS and its characteristics,
However, an anti-poverty programme
see Samal (1997b). According a study group
The Real Story’, EPW, Vol XXVIII, No 22,
pp 1084-88.
of NABARD in Orissa, RNFS is defined as
cannot be effective or sustained without active
sector
which
comprises
all
non-agricultural
Psacharopoulos,
George (1988): ‘Education and
and vigilant participation by the poor deman
Development: A Review’, The World Bank
activities: mining and quarrying, household
ding the benefits as part of their minimum
Research Observer, Vol 3, No 3, pp 99-116.
and non-household manufacturing, processing,
social and economic rights [Bardhan 1996].
repairs, construction, trade, transport and other
Rao, C H Hanumantha (1994): Agricultural
Growth, Rural Poverty and Environmental
Of course, it is difficult to organise the poor
services in villages and rural towns with up
Degradation in India, OUP, New Delhi.
to20,000 population, undertaken by enterprises
who are weak and fragmented. But in two
Ray, Sumit (1997): ‘Globalisation, Structural
varying in size from household ‘own-account
orthreestatesoflndia,local level institutions
Change and Poverty: Some Conceptual and
enterprise’ all the way to factories.
ofgenuine local democracy have spread roots
Policy Issues’, EPW, Vol XXXII, No 33 and
References
34, pp 2117-35.
and groups of the rural poor have been
Ravallion,
Martin (1992): ‘On Hunger and Public
mobilised to demand and get some benefits
Bardhan, Pranab (1996): ‘Research on Poverty
Action:
A Review of Article on the Book by
and Development Twenty Years After
and subsidies flowing from the top. Organisa
Jean Dreze and Amartya Sen', TWBRO, Vol 7,
‘Redistribution with Growth’ ’ in Michael
tion ofpoorand their well-planned movement
No 1, pp 1-16.
Bruno and Boris Pleskovic (eds), Annual
Riddell. Roger C and Maark Robinson (1995):
can reduce the social and political control
World Bank Conference on Development
Non-Governmental
Organisation and Rural
of rural lords. The power demonstrated by
Economics 1995, The World Bank.
Poverty Alleviation, Clarendon Press, Oxford.
Washington, pp 59-72.
forceful movement by organisation of poor
Samal,
KishorC
(1994):
‘Ca.seStudy:Drought ’
Basant,Rakesh(1994): ‘Economic Diversification
can even improve the indifferent, routine
and Its Toll in Kalahandi’, Mainstream, .
in Rural Areas: Review of Processes with
work cultured, corrupt and i nefficient bu reauVol XXXII, No 14, pp 24-26.
Special Reference to Gujarat’, Economic
- (1997a); ‘Retooling Rural Financial
cracy and local government functionaries.
and Political Weekly, Vol XXIX. No 39,
lnstitutions’,Ecwir>/n/c and Political Weekly,
September 24.
Vol XXXII, No 6, pp 307-308. '
. vm
Besley, Timothy (1997). ‘Political Economy of
- (1997b): Features and Determinants of Rural
Alleviating Poverty: Theory and Institutions’
Conclusion
Non-Farm Sector in India and Orissa: A
in Michael Bruno and Boris Pleskovic (eds),
Survey’, Journal of Indian School of
Local level institutions of genuine local
op cit, pp 117-34, The World Bank,
Political Economy, Vol 9, No 1, pp 65-93.’
Washington.
democracy, effective and practicable land
-(1997c): ‘Rural Non-Farm Activities'in Specific
reform, expansion of primary and secondary' Canfield, Catherine (1996): Master of Illusion;
Regions of Orissa’, Journal of Rural
The World Bunk and The Poverty of Nations,
education, proper system of credit delivery
Development, Vol 16. No 3, pp 457-64.
Macmillan;, London.
Samal, Kishore C and Artatrana Rath (1997):
and steps for growth of rural non-farm sector,
Dasgupta, Biplab (1995): ‘Institutional Reforms
“Role of Informal Credit Sector and Service
and Poverty Alleviation in West Bengal’, EPW,
and organisation of rural poor are much
Co-operative Society in Rural Credit Market”
Vol XXX, No 41 and 42, pp 2691-702. '
essential to empower the rural poor and thus
in
Baidyanath Misra (cd) Co-operative
Dreze, Jean (1990): ‘Famine Prevention in India’
to alleviate poverty and to eradicate hunger.
Movement in India: A Case Study ofAn Indian
in J Dreze and A Sen (eds) The Political
State; A P H Publishing Corporation, New
Economy of Hunger, Vol 11, Clarendon Press,
Notes
Delhi, pp 189-98.
Oxford, Chapt 2, pp 13-122.
UNDP (1993): Human Development Report 1993,
Dreze,
Jean
and
Amartya
Sen
(1989):
Hunger
and
[The authorgratefully acknowledges the comments
OUP, New York.
Public Action, OUP, New York.
of Baidyanath Misra. R S Rao, Golak Nath and
-(1997): Human DevelopmentReport 1997, OUP,
others on the earlier drafts and is thankful to - (1990): ‘Introduction’ in J Dreze and A Sen
New York.
(eds). The Political Economy ofHttnger,Vo\ I,
Damodar Jena, ReniibalaSahu and Kalyani Meher
Vyas, V S and Pradeep Bhargava (1995): ‘Public
Chapt I, Charendon Press, Oxford, pp 1-11.
who helped in analysing data. The us ual disclai mer
Intervention for Poverty Alleviation: An
Economic and Political Weekly (1985): ‘Orissa:
applies.]
Overview’, EPW, Vol XXX, No 41 and 42,
Drought and Poverty: A Report From
1 The ‘poverty line’ has been defined in terms
pp
2559-72.
Kalahandi’, November 2, 1985, pp 1857-60.
of annual income of a family consisting of five
Vyasulu, Vinod (1995): ‘Management of Poverty
Edwards. Scbastin (1995): Crisis and Reform in
members on an average. The poverty line has
Alleviation Programmes in Karnataka: An
Latin America: From Despair to Hope, OUP,
been changing from plan to plan. It was Rs
Overview’, EPW, Vol XXX, No 41 and 42,
Oxford.
3,500 per family in the Sixth Plan which Fishlow, Albert (1996): ‘Inequality, Poverty and
pp 2635-50. ’
increased to Rs 6,400 in the Seventh Plan and
Yaron, Jacob (1994): ‘What Makes Rural Financial
Growth: Where Do We Stand?’ in Michael
further to Rs 11,000 in the Eighth Plan.
Institutions Successful’, TWBRO. Vol 9, No 1,
Bruno and Boris Pleskovic (eds), op cit. The
However, the income level of Rs 8.500 is taken
World Bank, Washington, pp 25-39.
pp 49-70.
as the cut-offpoint for identification of families
World Bank (1980): World Development Report
Green, Duncan (1995): Silent Revolution: The
for assistance under different programmes in
Rise of Market Economies in Latin America,
1980, The World Bank, Washington.
the Eight Plan.
The Latin America Bureau, London.
- (1990): World Development Report 1990, The
2 If the modal class of (he income distribution Hoff, Karla and Joseph E Stiglitz (1990):
World Bank, Washington.
earlier, by effective land reform to destroy
land monopoly and expansion of primary'
and secondary education to raise the
consciousness of the rural mass. Land reform
and spread of education will have a sociopsychological impact on the poor to
participate democratically in the local-level
institutions by checking local overlords to
capture gram panchayats, co-operatives, etc.
The local level institutions and organisations
can function effectively, with regular election
and earmarking major portion ofdevelopment
budget to be spent by them since they have
intimate knowledge of local economy and
society and arc accountable to local people.
This is what happened in some states in India
[Dasgupta 1995; Vyasulu 1995].
Economic and Political Weekly
July 11. 1998
1851
Poverty and Participation in Civil Society
SPED 1992. Field Methods Manual Volume I: Diagnostic Toolsfor Supporting
Joint Forest Management Systems, prepared for the joint Forest Management
Support Program, Society for Promotion of Wastelands Development, 1
Copernicus Marg, New Delhi 110 001
Chapter Four
POVERTY ERADICATION
AND PARTICIPATION IN AFRICA*
Swift, Jeremy and Abdi Noor Umar 1991. Participatory Pastoral Development
in Isiolo District, Final Report, Isiolo Livestock Development Project,
EMIASAL Programme, Kenya
Structural Issues Barring Participation of the Poor
Tamang, Devika 1993. Living in a Fragile ecosystem: indigenous soils
management in the hills of Nepal, Gatekeepers Series 41, IIED, London
Sadig Rasheed
Tiffen, Mary, Michael Mortimore and F.N. Gichuki 1993. More People, Less
Erosion: Environmental Recovery in Kenya, John Wiley and Sons, Chichester,
New York, Brisbane, Toronto, Singapore
Ulijaszek, S.J. and S.S. Strickland eds 1993. Seasonality and Human Ecology,
35th Symposium Volume of the Society for the Study of Human Biology,
Cambridge University Press
Walker, T.S. and J.G. Ryan 1990. Village and Household Economies in India's
Semi-arid Tropics, John Hopkins Press, Baltimore and London
Welboun, Alice 1991. "The Analysisof Difference", RRANotes 14, December
pp 14-23
I.
Profile of Poverty
Poverty eradication is a major challenge worldwide.
Yet, it is a particularly daunting one in Africa. While data on
poverty in Africa is generally lacking and often fragmented,
evidence available from diverse sources consistently
underscores the acuteness of the poverty situation and its
severity in the continent in relation to other parts of the
world.
The World Bank estimated, in its 1990 World
Development Report (WRD), that in 1985 there were 180
million people, or 47 per cent of the total population, in subSaharan Africa below the poverty line.1 In its WRD 1992, the
Bank revised these figures upward to 184 million, and 47.6
per cent, respectively.2 The same Report estimated that both
the number and proportion of the poor below the poverty
•The views expressed in this paper are those of the author and should not be
attributed to the UN Economic Commission for Africa.
77
78
Poverty ai^^articipation in Civil Society
line increased to 216 million and 48^> per cent, respectively,
in 1993?
UNDP's Human Development Report 1994 gives a
higher estimate of 54 per cent for the proportion of people
living in absolute poverty in sub-Saharan Africa in 19801990? The data of the International Fund for Agricultural
Development (IFAD) on rural poverty alone is even more
grim. It estimates that 204 million out of337 million, or 60 per
cent, of the rural population lived, in 1988, below the poverty
line? Africa's rural population constituted 73 per cent of the
total population in that year.
Disturbing as these figures are, the debilitating state
of poverty in Africa can be properly perceived only when
other manifestations of poverty — such as the pervasive
hunger and famine; the rapidly rising number of refugees,
displaced persons and destitutes, inadequate levels of access
to health education and education services; high mortality
rates; and high incidence of social and economic
marginalization and exclusion — are adequately taken into
account.
In spite of the efforts to improve social conditions
over the years, these have remained alarmingly inadequate
and have shown further deterioration on many fronts. The
average life expectancy of 52 years is thirteen years lower
than the world's average and is less by eleven years than the
average for the developing countries as a whole. The
percentages of the population having access to heal th services,
safe water and sanitation are 59,45, and 31 respectively; and
the average calorie supply per capita is only 92 per cent of
requirements. Access to education and training at ail levels
in Africa continues to be limited. Only one out of every three
women, and two out of every three men, are literate, making
the adult literacy rate of 51 per cent the lowest in all regions
and lower by 18 per cent than the average rate for all the
developing countries. Furthermore, gross enrolment in
schools has fallen from 39 per cent in 1980 to 35 per cent in
Povei^Eradication and Participation in Africa
79 .
199(^md the average annual rate of growth of enrolment has
plummeted from 8 per cent during 1970-1980 to 2.8 per cent '
during 1980-1991. Critical as the general situation is, it is even
worse for children and women. The mortality rates for
infants (under 12 months) and children (under 5 years) are at
101 and 160 respectively, the highest of all the regions. The
percentage of children who are underweight, wasted, and
stunted are 31,13, and 44 respectively.6 Famine and hunger
have become endemic in many parts of Africa. Drought,
armed conflicts and civil strife have combined to swell the
number of refugees and displaced persons to 20 million. The
tragedy of Rwanda alone has inflated that figure by 4 million
in 1994.
Some appreciable efforts have recently been made to
develop poverty indices to measure the nature of poverty
beyond the conventional headcount indicator. IFAD's Food
Security Index (FSI); Integrated Poverty Index (IPI), Basic
Needs Index (BNI) and Relative Welfare Index (RWI)7 are
useful composite indicators in further illustrating the many
facets, extent, and depth of poverty in Africa.
Africa is a highly food insecure continent. Thirty-nine
countries, out of a group of 49 African countries, constituting
79.6 per cent, rank as severely or moderately food insecure in
accordance with IFAD's FSI? Of a total of 37 countries
worldwide that are classified by IFAD as "low food security
countries", 21 are in sub-Saharan Africa?
The extent of this food insecurity is further revealed
through the disaggregation of the components of FSI. Between
the periods 1965-1967 and 1986-1988, the food staples self-
sufficiency ratio in sub-Saharan Africa fell from 98 percent to
93 per cent, while the number of food deficit countries
increased sharply from 28 to 41 for the same period.11’
Particularly serious is the fact that a large and growing
number of countries have been unable to satisfy even the
most rudimentary nutritional needs of their populations. 33
of Africa's 42 sub-Saharan countries have per capita energy
supplies below the minimum requirements.11
Poverty and Participation in Civil Society
80
In terms of relative poverty (as measured by the
IPI),12 80 per cent of sub-Saharan African countries (36 in
number) have "severe poverty" (i.e. IPI >0.40), while another
six countries, or 13.3 per cent, have "moderate poverty" (0.40
> IPI > 0.20). Only three countries are classified as having
"relatively little poverty". "Severepoverty" is less pronounced
in other regions amounting to 58 per cent in Asia, 44 per cent
in Latin America and the Caribbean, and 15 per cent in the
Near East and North Africa (see Table 1).
Table 1: Regional Profile of Integrated Poverty Status, 1988
Number of Countries in:
Region
Severe
Moderate
Relative
Poverty
Poverty
Little Poverty
(IPI >0.4)
(0.4 > IPI > 0.2) (IPI < 0.2)
Total
Asia
14
6
4
24
Sub-Saharan Africa
36
6
3
45
2
3
8
13
Near East and North
Africa
Latin America
and the Caribbean
14
11
7
32
Total
66
26
22
114
35
7
—
42
Least Developed
Countries
Note: The integrated poverty status is determined on the basis of the percentage of
the rural population below the poverty line, the income-gap ratio (difference in GNP
per capita income of the country from the highest in the sample of 114 countries
expressed as a percentage of the latter), the distribution of income below the poverty
line as reflected in the life expectancy at birth, and the rate of growth of GNP per
capita.
Source: Jazairy et al., The State of World Poverty, op. cit., p. 35, Appendix, Table 2A.
IFAD's BNI13 is a composite indicator of education,
health and safe water and sanitation. Measuring Africa's
poverty through the use of this indicator clearly reveals the
Poverty Eradication and Participation in Africa
81
continent's disadvantageous situation. Twenty-nine of the
sub-Saharan countries (69 per cent) rank as "very needy"
(BNI < 0.50); 15, or 33.3 per cent, as "moderately needy" (0.75
> BNI > 0.50); and only two countries rank as "relatively less
needy".14
The RWI15 is a combined measure of adjusted FSI, IPI
and BNI. Of a list of 20 "Extremely vulnerable" countries
ranked lowest in terms of RWI, 17, or 85 per cent, were
African.16
The extent of impoverishment in Africa can be further
revealed by the fact that out of 55 countries classified by
UNDP's Human Development Index17 as belonging to the
"low human development" category, 41 countries, or 79 per
cent, were African. Only 22 African countries belong to the
"medium human development" category and none belonged
to the category of "high human development" countries.18
The majority of the rural poor in Africa are
smallholders (73 per cent), followed by the landless (11 per
cent), the nomadic pastoralists (13 per cent) and small
artisanal fishermen (3 per cent).19 Poverty is most severe
among African women. 31 per cent of rural households in
Africa are headed by women compared with 9 per cent in
Asia, 17 per cent in Latin America and the Caribbean and
17 per cent in the Near East and North Africa.20 Of 564
million women below the poverty line worldwide, 129
million are in sub-Saharan Africa.21
While rural poverty is pervasive in Africa, urban
poverty has increasingly become a major cause for concern
as its rates of growth are quickly surpassing those of rural
poverty. Across sub-Saharan Africa 23 per cent of the urban
population has become poor.22
It is, thus, evident that poverty is extremely acute in
Africa and also that its state is much more serious than
implied by the mere reference to the headcount indicators.
82
PovertxJ^^l Participation in Civil Society
Poverty^miication and Participation in Africa
The extent and intensity of human suffering and deprivation
among the majority of African people can hardly be matched
elsewhere.
II.
Poverty Eradication: What Prospects?
And What Policy Implications?
Economic and development policies of the 1980s and
early 1990s have not succeeded in either turning around the
failing economies or reducing poverty in Africa. Indeed,
they have not been sensitive enough or directly geared to
addressing the latter cause. During the 1980s, the African
economies barely grew at an average annual rate of 2 per
cent, translating into a negative rate of growth of per capita
incomes of 1.1 per cent annually. Economic performance
during the first half of the 1990s was even more disappointing.
During 1990-1994, the regional GDP grew at an average rate
of 1.3 per cent, and per capita incomes fell by 1.8 per cent, per
annum.23
The disappointing performance was accompanied
by a persistent decline in the per capit i rate of growth of
agricultural production, low productivity, and an
intensification of the unemployment problem. The food
production per capita index fell to 96 in 1991, in relation to 100
in 1979-1981,24 while the index of per capita agricultural
production measured 98 also in 1991.25 Indeed, Africa is the
only continent in which per capita food and agricultural
production have been declining during the past two decades.
For the developing countries as a whole these indices were
118 and 113 respectively in 1991.26
Open unemployment is estimated to have risen from
7.7 per cent in 1978 to 22.8 per cent in 1990.27 Productive
employment grew at an average rate of 2.4 per cent per
annum, while the labour force increased at a rate of 3.2 per
cent in recent years.28 The share of the labour force in formal
sector wage employment is low andhasalsobeen decreasing
83
from a regional average of 10 per cent in 1980 to less than 8
per cent in 1990.29 On the other hand, employment in the low
productivity and low income informal sector increased rapidly
during the 1980s and accounted for 25 per cent of the labour
force in 1991,30 suggesting not only an increasing
informalization, but also a structural unemployment and
underemployment problem. But employment opportunities
in this sector are rapidly becoming saturated.
Underemployment has been increasing rapidly and is
estimated to currently affect about 100 million Africans.31
No wonder then that human conditions and the
poverty situation have worsened during the past fifteen
crisis-ridden years in Africa. During much of those same
years, the economic policies practised by the majority of
African countries were dominated by structural adjustment
programmes (SAPs). An intense debate has been raging over
the past decade over the impact of SAPs on poverty. While
in the early 1980s not much reference has been made to the
positive impact of SAPs on poverty, such a perceived or
expected impact has been referred to with more and more
assertiveness in the documents of the World Bank and also
by some of its economists in recent years. As an example,
Ishrat Husain asserts:
Because the majority of Africans — and the majority of
Africa's poor — live in rural areas and are self-employed
smallholders, adjustment programs that move the terms of
trade in favor of the rural sector and focus on broad-based
growth in agriculture offer the most immediate opportunity
for alleviating poverty and promoting economic growth?2
He goes on to conclude:
The conventional wisdom that the poor in Africa have
suffered under structural adjustment programs is not
substantiated by the review of empirical evidence. As most
of the poor live in rural areas, the shift in rural terms of trade
has helped augment the incomes of the poor. Public
84
Poverty and Participation in Civil Society
expenditures on social services have also not taken a major
cut in most adjusting countries.33
Counter arguments and mounting evidence do, how
ever, point to the contrary.34 It was, for example, generally
observed that:
IFAD's experience in countries undergoing structural
adjustment programmes suggests that while the benefits of
these programmes to production and income in the long
term may be beyond question, in the short term they may
have a negative impact upon the rural poor. Three areas are
of particular concern: disorganization of input and output
trading; deterioration of agricultural terms of trade and a
decline in production support services. Taken together
they can provide a major disincentive to farmers to improve
their productivity in precisely the ways that structural
adjustment programmes seek to promote.35
IFAD also concluded:
Such programmes, however, and the public expenditure
cuts typically associated with them, can have adverse
consequences for the smallholder sector and for poverty
alleviation programmes.3’'
Devaluation, price increases and liberalization of
internal trade and imports have often worsened the status of
the poor. Jamal estimates that 30-40 per cent of the African
farmers are quite likely to be "net purchasers" of food.37
Higher producer prices for those and the category of the
landless do not necessarily translate into higher incomes.
Liberalization of agricultural marketing has often impacted
negatively on poor producers in many countries.
IFAD observed in Congo that
Liberalization of food crops marketing, whereby price
ceilings imposed by the marketing boards were abolished
and private traders were allowed to compete freely, did not
lead to the expected increase in production by small holders.
Poverty Eradication and Participation in Africa
85
Credit ceilings under the structural adjustment programmes
prevented existing financial institutions from satisfying
farmers' and traders' increased demands for credit.
Similarly, increased interest rates associated with the
structural adjustment programmes disrupted small farmers'
access to credit slowing down production increases and
marketing activities.38
In many cases, import liberalization has also hurt
domestic production, adversely affecting from pastoralists
in West Africa to indigenous industries in many countries.
The economic crisis and the economic reform
measures during the past decade-and-a-half have resulted in
a deleterious combination of high inflation rates, higher
consumer prices, salary freezes and retrenchment of public
sector employees. These, in turn, have deepened and
increased the incidence of urban poverty. Urban incomes
have fallen so steeply and by more than rural incomes to the
extent that many economists have concluded that the "rural
bias is now well ensconced in Africa".39 Indeed, Jamal and
Weeks have maintained that the limits to falling wages and
increasing prices have already been reached under SAPs
without any realization of the expected beneficial impacts on
the expansion of wage employment and output.40
Even though some studies have concluded that the
level of health and education expenditure as a percentage of
the GDP and per capita spending levels in these two areas
have remained stagnant during the 1980s in adjusting
countries,41 there is a growing consensus that cuts in the
proportions of public expenditure spent on health and
education have occurred during the past 15 years in African
countries—including adjusting countries—as a result of the
economic crisis and policy reforms. Such cuts together with
the imposition of user fees have curtailed access by the poor
to those basic services and increased hardship among the
poor tremendously. In this context, the following
observations in a recent study by the Bank are instructive:
86
and Participation in Civil Society
Overall cuts in spending have not been a central feature of
adjustment programs in Sub-Saharan Africa, but it is still
likely that there were spending cuts in social services that
had previously benefifed the poor to some degree. Poverty
reduction was not an explicit central objective of early
adjustment programs, and, until recently, little attention
was given to the level and composition of social expenditures
— a shortcoming that is being corrected...But there is little
evidence that thecomposition of the spending has improved
substantially in favour of the poor in any of the adjusting
countries, though a few countries have started to make
strong efforts in that direction.42
Both the Bank and the adjusting African countries do
indeed acknowledge that SAPs have social costs, at least in
the short run, and social safety nets have been introduced in
an attempt to mitigate the adverse impact of these
programmes on the poor. The limited resources of these
funds and the manner in which they have been implemented
have not enabled them to succeed in reducing poverty
among the "newly poor" in any appreciable manner, let
alone cause them to make a dent in the more stubborn
widespread structural poverty. For example, the funding
levels of the social safety nets were $ 10 million in Zimbabwe,
$ 80 million in Ghana, and $ 600 million in Egypt. Only 0.3
per cent of the population in Ghana and 0.5 per cent in Egypt
were reached through these programmes. In Zimbabwe,
less than 1 per cent of the retrenched workers have been
reached by the training programmes that have in the first
place been designed to assist them.43
A study by UNRISD concluded in this regard as
follows:
Such programmes are not an answer either to social costs
of adjustment, or to poverty in the context of adjustment
and should not provide an excuse for not taking seriously
the question of how to refine adjustment programmes to
make them more sensitive to the needs of the vulnerable of
the poor.44
Povel^^radication and Participation in Africa
87
The Bank itself acknowledges the limitations of safety .
nets and suggested that special social funds and social action
programmes "shouldnotbea substitute formore fundamental
restructuring of social sector spending to increase efficiency
and reduce poverty".45 It also concluded that "more attention
needs to be given to the alleviation of the suffering of the poor
during adjustment".46
The very fact that poverty, both proportionally and in
terms of numbers, has increased and deepened during the
past decade in Africa—including in the intensively adjusting
countries — is in itself a clear indication of the inadequacy of
the development policies and approaches that have been
adopted. If current trends continue and with a population
growing at an average annual rate of 3.1 per cent and a fragile
environment that is being rapidly overexploited and taxed,
the poverty situation is apt to worsen considerably. Indeed,
the World Bank projects — on the assumption that per capita
income would grow by 0.3 per cent, which is not the case
now, during 1990-2000 — that sub-Saharan Africa will be the
only region in which both the proportion and the number of
poor will increase. It estimates that the number of poor will
reach 304 million, or 49.7 per cent of the population in the year
2000, and sub-Saharan Africa will then be home for one
quarter of the world's poor.47
Two central corollaries of the foregoing discussion
are that first there can be no task more urgent or strategic in
Africa than the eradication of poverty and achieving humancentred development, and second that these strategic
objectives cannot be achieved on the basis of adjustment
based policies.
Economic reforms and adjustment are important and
countries must adjust to changing economic circumstances.
But adjustment and economic reforms cannot constitute the
whole basis for development, nor should they substitute for
it. Sustained accelerated economic growth is essential for a
successful strategy of poverty eradication. However,
Poverty and Participation in CM^ociety
adjustment in Africa has not been able even to spur that kind
of growth and is not likely to do so in future mainly due to the
structural deficiencies in the African economy.48
Thus, poverty eradication and human-centred
development need to become the ultimate objective and to
form the very core of development strategies and policies;
and the challenge here for the African countries is to adopt
imaginative, comprehensive and integrated strategies of
development and structural transformation of their economies
in which human development concerns would predominate.
Adjustment would thus be part of the broader developmental
context, not a substitute for it. To achieve these interlinked
objectives of human-centred development and structural
transformation calls not only for major policy shifts and
augmentation and redirection of resources for this purpose
on the part of African countries at the national, sub-regional
and regional levels, but also for similar actions by Africa's
development partners, including bilateral donors, NGOs
and the international financial institutions and development
organizations.49
III.
Poverty and Participation:
Agenda for Empowerment
For long, Africa's poor, who form the majority of the
population, have suffered economic, political and social
marginalization and exclusion. Such a lack of participation
has not occurred merely as a byproduct of their poverty. It
occurred mainly because of cumulative structural factors
and, more significantly, as a direct result of deliberate policies
of an overwhelming majority of successive repressive and
unrepresentative regimes which did no t encourage or facilitate
economic participation, deepened economic inequalities and
social disparities and stifled the practices, culture and
institutions of democratic and pluralistic polity.
Effective economic, social and political participation
is essentially an expression of effective economic and political
Poverty Eradication and Participation in Africa
89
empowerment. In the absence of such empowerment, not
only will it be next to impossible to respond effectively to the
needs of the poor and improve their conditions, but it will
also be futile to attempt and to revive the failing economies,
to hope to accelerate growth and development on a sustained
and sustainable basis, or to bring about the socio-political
stability that is so very vital for achieving these tasks.
Much of the poverty in Africa is structural in nature.
It is now generally agreed that among the main factors
causing such poverty are the starkly uneven distribution of
wealth, assets and incomes; the gender and ethnic bias
blocking opportunities for economic participation; undue
control by a ruling minority and allied interests over political
power, governance institutions, production structures and
economic policies; adoption of economic policies and
investment and public expenditure patterns that are overly
discriminatory against the poor and their interests; and
application of discriminatory laws and bureaucratic
procedures that are disadvantageous to the poor.
Without effective economic, social and political
empowerment and participation on the part of the poor,
these structural causes of poverty cannot be adequately
addressed. Furthermore, without the effective involvement
and participation of the poor in the design, implementation
and monitoring of policies, programmes, and projects targeted
to eradicate poverty one can hardly expect these efforts to
bear fruit. Studies carried out all over the world documented
the disappointing outcomes of policies and programmes
aimed at the poor, precisely because of the failure to involve
the beneficiaries and build on their initiatives in the first
place.
In spite of the growing rhetoric and widely espoused
awareness on the part of African governments and their
international partners of the need to practise participatory
development appro iches, there is mounting evidence in
support of the opposite. Even in the straightforward case of
1,0
Poverty aii^Participation m Civil Society
social safety nets — which are inteWed to benefit the poor
and cushion the negative impact of SAPs in a rather direct
fashion, the poor are not consulted. There is a need to
understand and to adapt the strategies that the poor
themselves have devised for their survival.
A study in Ghana described participation in the
programmes as "truncated". The beneficiary communities
have not been consulted on project selection, the project
priorities were "set centrally", and the beneficiaries merely
contributed their labour inputs to the project.50 A study by
UNRISD has come to the conclusion that priorities, design
and control of safety nets have mainly been determined by
the state and the donors.51
Similarly, meaningful economic participation and
empowerment of the poor and grassroots organizations
hardly seem to have been the outcome of safety nets. In
Egypt, NGOs sponsored by influential individuals received
priority treatment in funding,52 and in Ghana, one large NGO
benefiting from the fund has been described as a "thinly
disguised political organization".53 In Zimbabwe, less than 1
per cent of the retrenched workers have been able to get
access to the training programmes designed to assist them;
26 per cent of the targeted urban poor benefited from food
support programmes and only 10 per cent benefited from
targeted educational support measures.5,1 In Ghana, one
study indicated that only 1 per cent of the distributed funds
were earmarked for poor women, and no attempts were
made to reach women or collect data on gender.55
These examples clearly reveal the extent of the
difficulties involved in advancing the cause of participation
without effective empowerment being put in practice.
Economic, political and social empowerment are mutually
reinforcing. A comprehensive agenda needs to be
implemented if such empowerment is to be achieved to any
successful degree.
Poverty Eradication anil Participation in Africa
91
^Bzonomic empowerment of the poor requires
commitment on the part of the state to a democratic agenda
of development. An agenda which is decidedly pro-poor
and enabling of the masses. But such orientation is a function
of the quality of governance, and the prospects of forging and
implementing such an agenda for democratic development
and empowerment would depend on the extent to which
governance itself is democratic and truly representative of
the make-up and interests of the broad masses. The existence
and effective functioning of the institutions of democratic
governance and organizations of civil society could facilitate
the adoption of such a pro-poor development strategy and
exert pressure for the economic empowerment of the poor.
Africa can boast of few traditions of democratic
governance in the Western sense. Since 1989, a surge of
political liberalization has altered the political landscape in
Africa, to the extent that today the majority of African
countries can be described as politically open or quasi-open
societies undergoing different phases of a democratic
transition. Yet, the quality of this political liberalization
leaves much to be desired and is also fraught with possibilities
of setbacks. Under such conditions, democracy will thrive
and will be practised effectively to the extent that the masses
and their organizations are permitted and are actually able to
demand and exercise their democratic rights. Thus, CSOs
and NGOs have a historic role to educate the poor about their
democratic rights, convince them of the value and benefits of
exercising these rights — particularly the linkage between
political and economic gains — and assist them in practising
these rights.56
This in itself is not an easy task; Both the fact that the
poor tend to see little direct value in active political
participation and the negative perception gained from the
repression and hazards they have been subjected to in the
past, as a result of attempts at political dissent, are two
reasons that tend to make such a task more cumbersome.
This is why the CSOs, NGOs and newly emerging political
parties have a basic civic responsibility to build up true
. 92
Poverty and Participation in Civil^ciety
Poverty Eradication and Participation in Africa
’ democracy on the foundations of effective democratic
participation from the grassroots level. While it is the
responsibility of the state to create political space to allow for
effective political participation, and regardless of how genuine
the attitude of the State is in desiring to do so, political
empowerment and participation can only emerge, in the final
analysis, as a result of the struggle of the CSOs and the people
at large for such fundamental rights.
As mentioned earlier, effective economic participation
and empowerment of the African poor required deliberate
efforts and interventions on the part of the State to create and
enhance opportunities for such an objective. Broad macroeconomic reform measures cannot, on their own, guarantee
such participation and empowerment and may, indeed,
undermine these objectives even further. For example, the
experience of economic liberalization suggests that markets
are exploitative of the poor. In order that the poor are enabled
to participate economically through the market system, it is
important that: (i) barriers to market entry for the poor are
deliberately lowered; (ii) assistance is given to them, in ter alia,
to establish their own marketing channels and organizations
which would provide them protection against exploitation
by the rich and resourceful; and (iii) non-competitive practices
by the private traders are encouraged. If this is not done,
there is every likelihood that the market system itself would
further deepen their poverty. Thus, the preconditions for
effective economic participation by the poor are: cheaper
credit; alternative financial institutions for the poor;
enhancement of opportunities for access to assets with a view
to improving their productive capacity; and provision of
other infrastructural support services. Without direct
intervention to give the poor this kind of edge it is highly
unlikely that they could ever be economically empowered to
participate effectively in the economic arena.
For example the fact that 73 per cent of the rural poor
in sub-Saharan Africa are small holders dictates that priority
should be given to this large category of poor not merely to
93
eradicate their poverty, but also to ensure that they will be
able to contribute to economic growth in a significant manner.
Similarly, special efforts and a comprehensive package of
policies and programmes need to be implemented urgently
to deal with poverty among women, which would empower
them economically and enhance their opportunities for
participation in civil society. Given the predominance of
women among the poor, agricultural producers, in the
informal sector and as heads of poor households, eradication
of poverty among women and boosting production and
productivity dictate that urgent and concerted actions be
taken to address the economic and political empowerment
among women.
The NGOs are seen as the natural allies of the poor in
their struggle to achieve higher levels of economic
participation and empowerment. Their assistance could be
particularly vital in helping the poor to organize themselves
economically into productive, marketing and credit
associations and organizations and facilitate the smooth
functioning of these entities. Equally important is the role
they could play in demanding and taking actual advantage
of moves aimed at the decentralization of decision-making.
The poor are to be given opportunities to express themselves,
and to have a say in the policies, programmes and projects
that affect their lives. NGOs can also play an effective role as
advocates on behalf of the poor to demand a pro-poor
orientation in development strategies and policies, the
protection of the economic rights of the poor, and the
dismantling of legal and regulatory barriers to economic and
political participation and empowerment. They could also
act as "watch dogs" on behalf of the poor and monitor
compliance of pro-poor policies.
Various experiences of successful participation and
effective experiments of cooperation between NGOs and the
poor to foster political and economic participation can be
cited.57 A number of international partners, including
94
Poverty
ticipation in Civil Society
organizations within the UN system, have also been
supporting participatory approaches in Africa.
Commendable as these initiatives are, they have, nevertheless,
remained limited in scope. Furthermore, many African
NGOs have increasingly become more involved in purely
technocratic concerns and in the search for funds to the
detriment of their perceived role as agents of change and
advocates of empowerment of people.
Efforts at the national level to foster and strengthen
capacities for political, social and economic participation and
empowerment can be greatly strengthened through the
support of UN Agencies, bilateral and multilateral agencies,
and international NGOs. In spite of some change in aid
policies, international assistance and the many adopted policy
guidelines by international partners in recent years have
neither increased poverty eradication, nor participation and
empowerment of the poor. Investments in the poor, in
participator}' fostering activities, and in human development
have remained meagre, accounting for about 7 per cent of
ODA (Overseas Development Assistance). Moreover the
overall macro-economic orientation of aid policies has not
been sufficiently supportive of poverty alleviation and active
participation of the poor in civic life.
Notes
'See World Bank, World Development Report 1990. Oxford University
Press, New York, 1991, table 2.1, p. 29. The poverty line for the poor is
defined as $ 370 per capita a year in 1985.
Poverty Eri^^tion and Participation in Africa
95
sSee Jazairy, Alamagir and Panuccio, The State of Rural World Poverty,
New York University Press, New York, 1992.
''See ibid., table 11 of the annex.
rSee Jazairy, Alamagir and Panuccio, The State ofRural World Poverty, op.
cit.
"See IFAD, The State of World Rural Poverty — A Profile of Africa, table 1A,
p. 62. The food security index (FSI) combines measures of calorie
availability in relation to requirements, the growth of per capita energy
supply, food production, food staples self-sufficiency and variability of
food production and consumption. The FSI is measured as:
FSI = w1[(x]/(l+x6))(l+x,)'] + w,[xjx,/(l+x5)|]
where
x,
represents per capita daily calorie supply as a
percentage of requirements;
x2
the annual growth rate of per capita daily energy
supply;
x3
the food production index;
x4
the self-sufficiency ratio;
x5
the production variability;
x6
the consumption variability; and
w,
the relative weights attached to the two factors to
compensate for their unequal range of values.
’See Jazairy et al., The State of World Rural Poverty, op. cit., table 3.1, p. 31.
'“See ibid., table 3.5, p. 33 and table 3.6, p. 34.
;See World Bank, World Development Report 1992. Oxford University
Press, New York, 1993, table 1.1, p. 30.
Ibid., table 1.1, p. 30.
'See UNDP, Human Development Report 1994, Oxford University Press,
New York, 1994, table 18, pp. 164-165.
"See ibid., Table 3.2, p. 32.
,;The Integrated Poverty Index (IPI) is essentially an extension of the head
count ratio and Sen's index of poverty. It combines the percentage of the
population below the poverty line with the income gap ratio, the
distribution of income among the poor and the annual rate of growth of
100
Poverty and Participation in Civil Society
5<Guy Mhone, "Social Dimension of Structural Adjustment and
Stabilization in Zimbabwe: A Critical Review and Assessment" (mimeo),
UNRISD, 1994, quoted in Jessica Vivian, op. cit., p. 13.
Chapter Five
55Ibid., p. 12.
■’"See Sadig Rasheed, "The Democratization Process and Popular
Participation in Africa: Emerging Realities and the Challenges Ahead",
in Development and Change, No. 1, 1995.
POVERTY ERADICATION THROUGH
PARTICIPATORY DEVELOPMENT
Lessons from South Asia
57See Sadig Rasheed, "The Challenge of Sustainable Development in
Africa in the 1990s and Beyond", in Eastern Africa Social Science Research
Review, Vol. 9, No. 2, June 1993.
' Ponna Wignaraja
I.
Evolution of a South Asian Perspective
on Poverty Eradication
In the late 1940s and 1950s, amidst the process of
decolonization in South Asia, a number of ideas caught the
imagination of South Asian scholars and ruling elites. These
included the "instant" creation of new nation states (with the
illusion of transference of political power), the grand vision
of progress through modernization and industrialization,
and the notion of a single interdependent economic system
(known as "One World"). Taken together, these ideas
provided a paradigm that was to mould the destiny of the
South Asian Region for the next half century.
The partial success of India's early planning and
efforts at industrialization, the Green Revolution in Pakistan
and later in India, the aid flows and foreign "expert" advice
that accompanied it mesmerised all concerned andreinforced
the belief that a rapid social transformation was under way
with decolonization, and that the world economy would be
managed for the betterment of all people.
101
D
o
J
I
J
o
CP
f
102
Poverty and l^Bcipation in Civil Society
Whatever criticism there was of the process as it
unfolded within South Asia, came mainly from a minority of
conventional Marxist intellectuals who understood some of
the dangers of incorporation of South Asia into the global
capitalist framework. However, the conceptual limitations
of their analytical framework did not permit them to either
understand the complexity of the reality or to see many of the
sharper contradictions that were to emerge subsequently.
Mahatma Gandhi with his now famous dictum, "the World
has enough for everyone's needs, but not for anyone's greed",
provided an alternative vision for development. With his
death soon after Indian Independence, neither the theoretical
nor the practical implications of his vision for South Asia
were fully worked out.
As the warning signals began to emerge in the 1970s
(under the auspices of the United Nations Asian Development
Institute — UNADI), a group of South Asian scholars,
among others, attempted to understand the reality, question
the "development" intervention that had taken place and
began to systematically generalize from this new
understanding. A somewhat broader framework of political
economy was reflected in a trilogy of separate studies first
undertaken by these scholars between 1974 and 1979. These
early studies were published by the Dag Hammarskjold
Foundation in their Journal, Development Dialogue 1977:1,
1977:2 and 1979:2, and have now been republished in one
book under the title Towards a Theory of Rural Development.'
The beginnings of this alternative approach did not
rely on a priori theorizing or on borrowed thinking from
Western social sciences. It was essentially based on the South
Asian reality. The framework that emerged was rooted in a
more 'scientific' approach to South Asian history and culture,
unlike the conventional development paradigm which
ignored the cultural and the historical context. The material
basis for the generalizations on alternatives was provided by
the negative impact of a quarter century of development on
large numbers of people in South Asia, as well as by the first
generation of positive experiments at the micro grass-roots
Poverh^^idication through Participatory Development
103
level. This approach demonstrated the possibilities of
incorporating social justice and participation into a process
of accumulation and economic growth which would involve
and benefit the poor and the vulnerable in the all-round
development of their lives. In particular, there was increasing
evidence that such processes were sustainable at the micro
level. The development experiences of China's "socialism
under non-classical conditions", and of South Korea's
"capitalism under non-classical conditions" provided helpful
insights in this exercise.2
With the global system itself in disarray and the
structures and institutions of the South Asian nation states
unable to cope with the twin crises of development and
democracy, another intellectual effort was crystallized in the
1980s. A larger network of South Asian scholars (under the
auspices of the South Asian Perspectives Project of the United
Nations University) came together to try to understand the
steady slide of these societies into anarchy and destabilization,
despite the rhetoric of development, democracy, and regional
cooperation. Breaking out of the conventional paradigms
and transcending the cruder versions of Neo-classical and
Marxist thinking, they took a deeper look at the emerging
reality and articulated elements of an alternative within an
inter-disciplinary framework. The aim of the exercise was
not only to examine the available alternatives in terms of
categories that were hitherto neglected, but also to focus on
those alternatives which were sustainable in the present
South Asian context.3
A part of this United Nations University network
was also concerned w-ith the Gender and Equity crisis —
another facet of South Asia's growing economic, social and
political problems. Here again there was an increasing body
of positive evidence which indicated that poor women
contributed significantly to economic and social development,
particularly in the informal sector. There was also increasing
evidence that they could overcome their double burden of
104
Poverty and Participation in Civil Society
being women and poor, through better organization and
using local resources and knowledge, and their own creativity.
Moreover, where they had support from sensitive macro
institutions, the small development actions initiated could
operate also on a larger scale and be sustainable. A study
entitled Women, Poverty and Resources'1 attempted to draw the
lessons from these experiences for poverty alleviation among
poor women and to refine the concepts and methodology of
an alternative approach for South Asia.
Building on a number of development experiments
at the micro-level, a new study was published entitled
Participatory Development: Learningfrom South Asia,5 providing
a more systematic critique of the dominant development
paradigm and mainstream economics. The study identified
critical elements for an alternative methodology for reversing
some of the harmful processes resulting from the prevailing
paradigm. A number of people's movements and experiments
in South Asia, which have matured in the 1980s, provided
basis for a new approach advocated by the study.6 These
movements and experiments demonstrate the potential for
damage limitation and reversing past processes, as well as
suggest possibilities for initiating actions with the
participation of the poor and vulnerable, particularly at the
micro local level.
The five studies provide a culturally relevant point of
departure for moving systematically towards poverty
alleviation and sustainable development. The unambiguous
message is that a more complex strategy than hitherto
followed is required. This strategy would need to maintain
the gains from attempts at open economy industrialization,
with appropriate damage limitation on the poor resulting
from the "structural adjustment" policies, and at the same
time initiating a major process of social mobilization and
accumulation from the grass-roots. This process of social
mobilization would need to be supported by macro level
strategic Pro-Poor planning and the harmonization of this
strategic thrust with Open Economy.
Poverty Eradication through Participatory Development
II.
105
Some Lessons from Experience
Participatory action research experiments in South
Asia have provided some critical lessons for eradicating the
worst forms of poverty in South Asia. These are recounted
below.
Lesson #.l:
The emerging contradictions and the need for seeking an
alternative driving force to accumulation
Development intervention that took place when
South Asian countries emerged from colonial rule ignored
the fundamental fact that this region was a
predominantly rural society. The chosen "development
model" was both indifferent and inimical to rural
development. That model had three major components:
(a) central planning, control, and coordination as a top
down process; (b) industrialization and expansion of the
modern sector as a means of rapid economic growth; and
(c) assistance from developed countries to bridge the
savings, foreign exchange, and technological gaps. It was
assumed that rural South Asia would be carried on the
back of a modern urban industrial sector, until a new
society was created. With the benefit of hindsight, it is
now evident that the working of the model has not only
failed in its own terms, but has also caused fundamental
damage to the possibility of these new nations mobilizing
their own resources to the fullest to sustain this process.
From the failure of the "model" of development to
benefit the large numbers, comes the conclusion that the
South Asian region was confronted by a social and historical
framework in which the ideological driving forces of
accumulation which worked in the economically advanced
societies no longer offered a viable road to accumulation for
South Asia. Therefore, the compulsion for seeking an
al ternative driving force for accumulation, even in its narrower
conception, was mounting.
106
Poverty and i^^icipation in Civil Society
The new concept of development presented in the
late 1970s was in terms of fundamental humanistic values:
people-centred, rather than narrowly techno-economic. The
core objective was the de-alienation of man vis-il-vis the
material forces of production and society and a purposeful
growth of human capacities.
It needs to be emphasised that the South Asian
villages are not homogeneous economic and social entities.
The contradictions at the village level distort purely technical
thrusts planned and delivered bureaucratically from the top,
without the involvement and participation of the poor and
the marginalised. Such efforts have accentuated the
polarization process. Any positive strategy and intervention
under these circumstances must first separate the poor from
the rich and work with the former to actualize cooperative
values and initiate some unity and group actions according
to the felt needs of the poor. Such a process does not,
however, always get initiated spontaneously; an outside
intervention may be required to catalyse it. As the process
gathers momentum the people's knowledge system, which
is an integral part of the culture, should come into play and
new people's organizations, including village level savings
funds, be set up to economically sustain the process.
Built into such a movement should be a continuous
process of self-evaluation to facilitate timely corrective
measures. Evaluation should become part of the internal
dynamics of the process itself. The values or criteria used in
theevaluationshouldnotbe narrowly economic or quantifiable.
A number of values, however, may be perceived by the
people as being of strategic importance. Even though much
of economic benefits, attitudinal changes, and self
management are measurable in a variety of ways, what is
important is the raising of consciousness of the people and
the enhancing of the political power of those who were
hitherto marginalized. Initially, this may take the form of
building countervailing power.
Poverty
through Participatory Development
107
To test the approach and methodology, an action
research programme was initiated jointly with the activists
of the Bhoomi Sena — the Movement of the landless labour in
Maharashtra in India — to create jointly, new knowledge
about the social reality of poverty. This methodology of
dialogical research went beyond conventional social science
research and helped bring out the perceptions of people who
are involved in the struggle for survival. People utilized the
accumulated experience from their life and struggle while
considering various options and providing rationale for
their action, and building new institutions to tackle the
problem of poverty. This experience contributed to the
methodology of Participatory Action Research (PAR).
Lesson #.2:
The multifaceted crisis and the need for a more complex
culturally relevant economic and social response
In the 1980s, a wider network of South Asian scholars
began to systematically uncover the multifaceted crises that
had emerged in South Asia, which were not only further
marginalizing large numbers of people— both economically
and politically — and creating a crisis of survival for them.
The environment and the natural resource base were also
being destroyed, thereby generating a reverse flow of
resources from the region and creating violent unmanageable
social conflicts leading towards societal collapse and anarchy.
Politically, these consequences were compounded by the
erosion of democracy and a growing militarization of the
regimes.
The results of the development strategies can be
summed up as follows:
#
in the four decades since independence national
income has increased without significantly
alleviating poverty and agricultural growth has
increased food output without affecting the
nutritional status of the poor;
Poverty and Participation in CiutrSociety
108
#
foreign aid dependence is increasing, while
there is a continued reverse flow of resources
from South Asia to the rich industrialized
countries; and
#
the development strategies pursued were not
culturally relevant and did not constitute
qualitatively acceptable growth.
In sum, as a result of the uncritical continuation of
past development strategies, development (even in its own
narrow economic terms) was being undermined. Poverty
within these countries is reproducing itself and economic
disparities are increasing. They are nowhere near "take off"
stage to catch up with the rich countries. Therefore, an
alternative approach should focus on people rather than on
growth, and participation rather than highly centralized planning,
as a starting point. This involves both new interdisciplinary
theorising and new practice. It requires development of new
institutions and use of the knowledge system. A refined
methodology to reverse past processes through people's
praxis, i.e. the action-reflection-action process, must be
identified. The essence of this methodology is to have people
participate as subjects in the development process. The
people's knowledge system becomes a critical lever in
reversing the poverty reproducing process and to bring
about a change in their reality.
The crisis of state power in South Asia and the
problems and prospects of regional cooperation are also of
relevance. The crisis that was sparked by the acute inequities
resulting from the development process also had an impact
on the political process and democracy. Political power has
increasingly become centralized. Significant sections of the
peoples are denied participation. Minorities are tyrannized
and political power is increasingly wielded by military
bureaucratic oligarchies. The tendency towards growing
militarization and fragmentation of states along ethnic,
linguistic or religious lines creates internal conditions for
Poverty Eradication through Participatory Development
109
further external intervention. The crisis of the State thereby
assumes an international dimension and inhibits bringing
out the full potential of regional cooperation, which is
necessary for reinforcing the path of sustainable development
and democracy.
However, there are elements in the cultural traditions
of South Asia which would constitute an ideological basis of
a viable political alternative. It can be argued that there is a
major contribution of the cultural dimension towards building
democratic states in South Asia. The potential in the folk
consciousness of Islam for containing ethnic conflict within
the dialectic of unity in diversity is one example. Hindu
ideology and the role of women in Hindu society is another
example. Certain historical periods in which women asserted
their rights for equality can be identified, alongwith the
cultural roots of th e complementarity between women and
men in Hindu Society. The class character of militant groups
in ethnic conflicts represents another cultural element to be
taken into consideration.
There is a need for cooperation in South Asia. It can
be argued, for example, that the inherent asymmetry of
constituent states can be turned into a supportive factor in
the promotion of development and democracy in the region.
Such perceptions should guide future intellectual efforts,
now that SAARC (South Asian Association for Regional
Cooperation), the first manifestation of regional cooperation,
has come to stay. If countries individually do not have the
political will to systematically eradicate poverty, a collective
approach under SAARC auspices is advisable.
Lesson #.3:
The double burden of gender and equity—some innovative
approaches
The South Asian Network of the United Nations
University initiated a special study to understand the
relationship between gender and equity issues. The study
110
Poverty and ^^icipation in Civil Society
looked at the question of the double burden women face
within the dominant development paradigm. Over the past
decade, women's movements in South Asia have helped to
focus on the important role poor women play in development,
without benefiting from the process.
The study was an attempt to look at the role of poor
women in an alternative development strategy. It examined
several experiments in South Asia where poor women had
organized themselves primarily in informal sector activities
for micro-level development actions and gone beyond
survival to building new organizations and savings systems
to sustainable development. In most cases, this change in
their economic and social conditions was brought about
through the methodology of participatory action, using local
resources, and local knowledge. Where there was a sensitive
support system involving a government agency, an NGO, a
bank or a donor, these experiments were able to go to scale.
The process identified was very different from the
conventional process where poor women are seen as the
objects of the process and merely receiving credit and other
inputs "delivered" from outside in the name of "Women in
Development" programmes. Both the development
perspective and the methodology are further refined in these
people-oriented development experiences under varying
socio-political circumstances.
In South Asia, the eradication of the worst forms of
poverty through organization of poor women and their
empowerment has now gone beyond experimentation.
III.
From Lessons to Concepts and A More Rigorous
Methodology of Participatory Development
The network of South Asian scholars and activists in
a partnership have attempted to refine further the
methodology for not only partially reversing past processes,
but also initiating the transition to a new and more complex
strategy of development through social mobilization and
Poverty p^^cation through Participatory Development
111
participatory development. The studies carried out
highlighted the multifaceted crisis that is already upon
South Asia, albeit in varying degrees of intensity and inter
relatedness in different countries, making it imperative for
these countries to adopt a different development pathway.
Secondly, they provided a critique of the dominant
development paradigm to show that neither in its own
narrow ideological and socio-economic terms nor as a
response to the wider crisis has it been sufficient. Thirdly,
they articulated in an unambiguous manner elements in a
strategy based on social mobilization and a rigorous
participatory development process at the micro level, which
can both limit some of the damage of past strategies, as well
as go a long way towards eradicating the worst forms of
poverty and de-humanization in South Asia. This process at
the same time, once initiated at the micro-level, may provide
a transition to a sustainable pattern of development. Finally,
they helped refine some of the methodological and analytical
tools which are indispensable for reinforcing these alternative
processes already under way.
The above-mentioned studies did not pretend to
substitute a fully articulated alternative theory of
development for the conventional dominant theory that has
influenced development thinking and action in the past forty
years in South Asia. Rather, they propose a more complex
approach to the problems on two fronts: one, to selectively
maintain some of the gains from modernization and open
economy industrialization through appropriate macro level
damage limitation strategies; the other to build co-operative
and self-reliant village, local and regional economies as a
parallel process. This is to be based on productive use of local
resources — people, nature and knowledge — and keeping
the local surplus in people's hands. A corollary was to keep
the savings of the poor in their own control, through micro
savings and credit institutions. The major thrust of these
studies was on the latter aspect of the strategy,7 and on how
to reverse past processes beginning at the micro terrain. A
112
Poverty mid Participation in Civil Society
basic assumption here was that the poor are efficient and can
contribute directly to growth, and have demonstrated the
capacity to save, invest, create assets and repay loans.
Therefore, participation of the poor and vulnerable will
entail building new people's organizations.
To move to the new premises for a pattern of
development where growth, human development, and equity
need not be trade-offs, it is essential to attempt a critique of
the dominant development paradigm. An examination of
the fundamental concepts of the mainstream development
paradigm shows that the very design of this paradigm
precludes comprehension of the fundamental relationships
between people, nature and growth. As such, it is incapable
of formulating a sustainable relationship among them. The
particular form of economic growth that is in operation in
South Asia is not only perpetuating the poverty of the
majority of people, but is also eroding the natural, human
and financial resource base on which a new beginning could
be made.
The new approach suggested by these studies regards
those people who were impoverished and marginalized by
current growth processes as prime movers of history in
future. If the release of the creative energies of the people is
a critical factor, the question then is, what is needed to initiate
a process to enable them to use their full creativity and realize
their true self-worth? Once this is done, the further task of
building organizations to sustain and multiply the process
could be left to the internal dynamics of the process itself. The
essence of the process is mobilization, conscientization, and
organization of the people, in that order. This process could
proceed from being a countervailing factor to ensuring social
justice and greater equality for all.
Research is being carried out on new social movements
in South Asia that go beyond conventional trade unions and
the old co-operative movement which have run out of steam
or been distorted or co-opted. In any event, these old
Poverty Eradication through Participatory Development
113
institutions only addressed limited issues relating to people's
lives. Likewise, illustrative case studies are available on new
experiments, which show how people in this cultural milieu
view their lives holistically and respond to real life situations
by using local knowledge systems and resources. There is
further experience of sensitised catalysts and animators as
instruments to initiate or reinforce social praxis. From this
experience, generalizations are made on how to re-focus the
methodology of Praxis and PAR as an effective step in
moving forward in social transition.
Fundamental to this new methodology is the
epistemological proposition that the development of
development theory and practice itself occurs in a dialectic
relationship with each other and at each stage the lessons of
practice will form the basis for further theory. For this reason,
the formulation of the alternative theory must be rudimentary.
As actions are taken through praxis, more explicit theorizing
can follow. The nature of the alternative theory is that it
develops not through a priori formulations, but through the
comprehension of its application to practice at each stage of
praxis.
IV.
The Report of the Independent South Asian
Commission on Poverty Alleviation
The independent South Asian Commission on Poverty
Alleviation, set up by SAARC, further refined the perspectives
on poverty eradication delineated above. There is sufficient
evidence on the ground to support the view that neither the
conventional neo-classical nor Marxist concepts of Western
development were sustainable either in the North, or in the
South. In the current discussions the word "structural" is
used in two very different terms for the North and for the
South. The North has yet to understand fully the predicament
into which it has got into and the urgent need to bring about
changes in its approach to its own development, patterns of
excessive consumerism and wasteful use of global resources
Poverty m^Jnrticipntioii in Civil Society
Poverty E^^cation through Participatory Development
and in the management of the Global System. Even the
welfare state system which permitted the North to adopt
capitalism to changing conditions is unravelling.
What does South Asia do in the meantime? Does it
continue to embrace the fragmented concepts of economic
and social development, the dichotomized sequence in
redistribution with growth, the one-sided open economy
and simplistic structural adjustment in the ideologically
oriented financial sense (with or without a human face), and
provide vast natural, financial and human resources to
sustain an unsustainable and inequitable global order? As a
corollary to the paradigm implicit in these inadequate strategic
options, does it continue to make a plea to the North to
transfer 1% of GDP to the South? Internally, should the
South Asian countries try to tranquillize the poor and the
marginalised with some subsidies and a few scattered pro
poor projects delivered through "top down" planning
mechanisms? Should the South Asian intellectual community
continue to support this unsustainable practice with a
mishmash of theory and policy recommendations, which
have little relevance to the nature and magnitude of the
problem, the cultural values or the resource base?
The perspective which should inform the new
premises for action should be unambiguously pro-poor and
culturally relevant. It suggests action on two fronts: (a) the
open-economy industrialization front; and (b) the poverty
eradication front. These two parallel strategic thrusts, having
longer and shorter term time frames, can be harmonized as
the two processes evolve.
The elements that should inform the poverty
eradication front are:
•
Poverty can be eradicated in South Asia within
a ten-year time frame, leaving only a residual
number of poor who would need relief, social
welfare programmes and safety nets. This
residual category can be kept within
115
manageable limits and be carried by society
until they, too, can become part of the
mainstream of a sustainable development
process, where growth, human development
and equity are not trade-offs.
•
This would involve a doubling of GDP per
capita during this ten-year plan from the current
US $ 300 to US $ 600 per capita (given a projected
population growth rate of 1.8 per cent). This
means a GDP growth rate of 9 per cent per
annum for the region. This growth rate of 9 per
cent is an ambitious target, but achievable. It
can build upon the growth rate of 3.1 per cent
in the 1980s, which was achieved under very
adverse conditions. Each SAARC country can
phase its indicative planning targets according
to its own potential.
•
Such an increase will have to be produced by a
different pattern of development which requires
an explicit political commitment of the
leadership and the participation of the poor in
development. Such political commitment
would have to focus on the two conventional
targets of growth policy: lowering the
incremental capital-output ratio from 4:1 to 3:1
or less; and increasing the marginal saving
rates from the current levels to 27 per cent or
more. Such a large shift would also require the
involvement and participation of the poor
through their own institutions and mobilization
of their own savings, as well as those of the
non-poor. Lowering of the capital-output ratio
would involve a growth strategy based on
labour-intensive development, with high
productivity and human development.
A key element of the strategy which accepted the
premise that the poor are efficient, has to be to mobilize the
116
Poverty and Participation in Civil Society
savings of the poor themselves as a first step. South Asian
countries have little choice but to use labour, the factor in
surplus. The investment activity of the poor is effected
mainly not in the form of monetary instruments, but as asset
creation by transforming labour into capital. Combined with
social mobilization and proper organization, it can help
unleash new forces leading to efficient asset creation. The
"sharing and caring" characteristics of the poor in South Asia
and the values of "simplicity and frugality" too can reinforce
such an effort. Thus, in addition to the conventional
accumulation process by the state and the private sector,
there is the potential for a new accumulation process at the
base of economy in the informal sector by the poor themselves.
Lastly, this process must include a net transfer of
resources to the poor through pro-poor planning. Apart
from increasing their savings and having access to capital,
such a resource transfer can also take the form of improving
the social and physical infrastructure for the poor, once again
through their own participation. All this requires a major
effort at pro-poor planning and social mobilization, leading
to the release of the creative energies of the poor and the
building of their organizations.
•
•
Most of the poor in South Asia live in rural areas
and depend directly or indirectly on agriculture;
food security is an important component, not
only of survival but also of the basic dignity and
well-being of the poor. Thus, a foremost element
of the development pattern and the pro-poor
plan is to give a new priority to agriculture with
emphasis on food production and a food security
programme. The state needs to make an explicit
political guarantee of the right of the poor to
food security.
The designing of a strategy for small-scale,
labour-intensive industrialization for which
South Asia has a comparative advantage, forms
Poverty Eradication through Participatory Development
117
another element. This strategy would absorb
the unemployed and under-employed poor,
including youth, into productive activities.
Labour-intensive industrialization is a function
of the product mix, technology choice, scale of
activity, plant size and supporting institutions.
An essential prerequisite of the poverty
eradication strategy is human development,
which guarantees the right of the poor to
participate in decisions that affect their lives,
the right to food as a basic human right, the
right to work and the right to all information
services. Literacy, primary education, health,
shelter and protection of children have also
been included in this list of priorities. Defining
and promoting the role and status of women in
society and ensuring the full participation of all
strata and groups in development decision
making is necessary to make human
development holistic. The ultimate objective of
economic growth is to bring a higher level of
human development within the reach of the
poor and thus to expand the range of their
choices. In this way, development itself is
made more participatory and equitable, where
growth and human development need not be
trade-offs.
Although, initially, such a pro-poor strategy
and plan can be designed and implemented
independently of the longer-term open
economy industrialization and the associated
programme of structural adjustment.
Eventually the two strands of the overall
development pattern would have to be
harmonized with each other. Since they have
different time-frames, this harmonization could
take place as the two processes unfold.
1k
Poverty (^^Participation in Civil Society
At the Dhaka SAARC Summit in 1993, the Heads of
States, in an unprecedented decision, established the
"ownership" of this culturally relevant strategic thrust for
moving towards growth, sustainable human development,
and greater equity in the South Asian Region.
The implementation of these strategies would require
drawing on the many stocks of knowledge—traditional and
modem — which was available to South Asian countries and
gave greater technological choice. A great deal of research
support, using innovative inter-disciplinary social science,
giving modem scientific validation to traditional technology,
action research methodologies, capacity building and the
effective utilization of existing research results would be
required, if the goals of growth, human development and
poverty eradication are to be achieved within a reasonable
time-frame. This more complex development response was
also a prerequisite for stabilization of the multi-cultural and
multi-ethnic societies which are becoming unmanageable,
and for the consolidation of the democratic transformations
which are underway in South Asia.
More specifically, the Action Plan of the SAARC
Heads of States required that:
•
Each SAARC country draw up a
national Pro-Poor Plan in parallel with
the Open Economy Strategy at the
macro level and initiate a Social
Mobilization process at the micro
level, for eradication of the worst
forms of poverty within a ten year
period. This Pro-Poor Plan is based
on the assumption that the poor are
efficient and can contribute to growth.
The greater part of the poor do not
need to be passive recipients of relief,
welfare or social safety nets.
Poverty F^^ication through Participatory Development
•
As the parallel Open Economy and
Poverty Eradication strategies evolve
over different time horizons they have
to be harmonized, to permit mutual
reinforcement and to prevent further
sharpening of the contradictions in
society.
•
The experience gained and progress
achieved with Pro-Poor Planning and
the micro level Social Mobilization
that goes with it, should be shared
among the SAARC countries in a
process of experiential learning.
Progress will be reviewed at
subsequent SAARC Summits.
•
A new dialogue should be opened
with "donor" Organizations/
Governments, so that they could
create an enabling international
atmosphere that is supportive of
this poverty eradication strategy in
South Asia.
119
After the SAARC Summit decision, one major
dialogue was organized with a group of donor organizations,
catalyzed by United Nations University's South Asian
Perspectives Project (UN U / SAPP) and under the auspices of
the World Bank and the SAARC Secretariat, in October 1993.
The Bank responded positively to the Commission's
recommendations. The UNDP, ADB. (Asian Development
Bank), UNICEF, and IFAD (International Fund for
Agricultural Development) also participated in the
discussions giving their support to the findings and
recommendations of the Commission.
In January 1995, a group of scholars, professionals
and NGOs, as well as some Members of the Poverty
Commission reviewed the official follow-up dialogues. They
120
Poverty and Participation in Civil Society
drafted a "Call to Action" for more vigorous implementation
of the historic Dhaka Summit "Consensus oh Poverty Eradication
by the Year 2002". They also endorsed the establishment of an
Independent Policy Research Network for Poverty
Eradication through pro-poor planning and social
mobilization.
There is today a historic opportunity for SAARC to
build on the Poyerty Commission Report and the Heads of
States decision and articulate a New Social Contract between
the state and the poor in South Asia.
In South Asia, the complexity of the multifaceted
crisis should not be underestimated. The magnitude of the
poverty problem is too large to be taken care of merely by
relief and social safety nets. Subsidies and social safety nets
are an inadequate response and cannot be sustained over
time. Thus, a New Social Contract has to be designed for
Sou th Asia, based on the recogni tion tha t the poor themselves
are efficient and can contribute to growth. In any event, some
of the old welfare state concepts and practices are being given
up and the structural adjustment programmes are tending to
sharpen the contradictions in South Asian societies, without
providing an effective alternative in the short and medium
term.
This New Social Contract and the New Development
Paradigm that underlines it, seem to be a must for all poor
countries. It applies equally to the problem of the poor in rich
countries. South Asia has made the first steps towards
achieving this fundamental objective.
Poverty Eradication through Participatory Development
121
Notes
'de Silva, G.V.S., Wahidul Haque, Nirajan Mehta, Md Anisur Rahman,
and Penna Wignaraja, Towards a Theory ofRural Development, Progressive
Publishers, Lahore, Pakistan, 1988.
’Wignaraja, Ponna, "TowardsaTheory and Practiceof Rural Development"
in Journal of the Society of International Development, 1984:2, Rome, Italy.
’Wignaraja, Ponna and Akmal Hussain (eds.), The Challenge in South Asin:
Development, Democracy and Regional Cooperation, Sage Publications, New
Delhi, Newbury Park and London, 1989.
’Wignaraja, Ponna, Women, Poverty and Resources, Sage Publications, New
Delhi, Newbury Park and London, 1989.
’Wignaraja, Ponna, Akmal Hussain, Harsh Sethi and Ganeshan Wignaraja,
Participatory Development: Learning from South Asia, Oxford University
Press, Karachi and Oxford, 1990.
"Wignaraja, Ponna (ed.), New Social Movements in the South, Zed Books,
London and New Jersey, 1993.
This study will not go into details of the former aspect. There is now a
vast literature by the World Bank, from the U.N. System, International
Commissions, by theorists on "Limits to Growth”, New Economics
and Alternative Development which identifies the elements of the Open
Economy Strategy with Structural Adjustment, the causes of the
problems and suggests how to limit the damage inflicted by the macro
system as it works.
124
Poverty A lleviation and Housing Problem
handicap-related unemployment and poverty, as well as at the
redundancy payments associated with unemployment. Willmott
is also looking at the qualifications of those who have most
recently become unemployed. Nevertheless, what would be
valuable is a systematic cross-national study of the relationship
between such employment-related welfare benefits and the
incidence of poverty.
10. In the case of Britain see, for example, A H. Halsey et al., Origins
and Destinations, Oxford University Press, 1980.
11. These findings run counter to what -he ATD movement appears
to believe: namely that the extreme poor share a common history
and a collective identity inter-generationally: analogous, in some
respects, to that of the Gypsies, whose collective identity is also
threatened by the dominant society.
It is disturbing to note Willmott’s finding that existing income
support policies in several of the major Member States are far
from adequate in keeping larger families out of poverty, even
where the head of the household is employed (Willmott,
Unemployment and Poverty, October 1980, Chapter 6).
12. Various projects have attempted to assess the cost-effectiveness
of the innovations they have undertaken.
13. Writing from within the liberal tradition, see C.B. Macpherson,
The Political Theory of Possessive Individualism, Oxford
University Press, 1962; and F. Hirsch, op. cit. From the neo
Marxist tradition see J. O’Connor, The Fiscal Crisis of the State,
New York, St Martin’s Press, 1973; and C. Offe, Structural
Problems of the Capitalist State, in K. Bey me (ed.), German
Political Studies, Volume I, pp. 31-57.
7
Combating Poverty
STRATEGIES FOR SOCIAL WELFARE
A wealthy society which combats poverty is struggling with itself, to
counter its own practices which leave some of its citizens poor,
unhealthy, ill-educated ill-housed and unemployed. It is trying to
achieve a redistribution of resources in favour of its weaker members
and, more difficult, to secure that this redistribution is maintained,
which must entail some redistribution of power as well as resources.
The European Programme of Pilot Schemes for the most part
offers a set of community work starategies to achieve this goal. It
can be argued that some of the very small projects were experiments
in social case-work or group-work (e.g. the Camden Drop-In or the
Copenhagen project), but few projects had more than an incidental
concern with providing advice or therap, for individuals.
To say that they are mainly community work projects is not in
itself very helpful, however, for we lack a universally agreed definition
of community work.1 We can say that community work concerns
working with groups the achieve wider changes in society, but so
does politics and religion. Rather than search for an overarching
definition, it is more useful to say that there are severl different
strategies of intervention in society in favour of its weaker members
which go under the name of cummunity works all of which are
represented in the European Programme. In this chapter we try to
identify these major strategies.
The purpose of the classification we have developed is not
simply to divide up a long chapter, but to clarify some basic
differences between projects, and to help explain their activities,
p,
<3
vp
ch
126
Poverty A lleviation and Housing Problem
assumptions and objectives. This is a classification of strategies rather
than projects, for we recognise that strategies blend and change over
time, and that different actors can operate different strategies in the
same project. We hope that our classification will help understand
these shifts and tensions.
Three Traditions of Social Work
Before America’s War on Poverty there were two main
traditions in community work. One derived from the Charity
Organization Society of mid-Victorian England and was greatly
developed by the major voluntary bodies in North America, who
became very sophisticated in organising joint fund-raising activities
and operating integrated patterns of service delivery. The Social
Service Councils which figure in the Irish Combat Poverty Programme
are directly in this line of decent. With the growth of public social
services, these skills in manipulating bureaucratic organizations
became highly valued in the public sector. Thus in the European
Programme we find COPES in Paris assisting in the co-ordination of
six agencies providing child care services, while in Padua the comune
is redeploying its health and welfare services in new geographical,
administrative and professional patterns.
Meanwhile, a parallel tradition had emerged. This can be traced
back to the Settlement movement in late nineteenth-century Britain
and America, although its major development came in the context of
Western aid to the developing countries after the Second World
War. Schemes for economic and social development in these countries
ran up against a cultural gap between local people and outside experts.
On the one side was a population more motivated to protecting its
traditional pattern of life than to economic change and suspicious of
outsiders whose main concern in the past had been to collect rents,
taxes or loot. On the other side, the scientific experts often had little
understanding of the land tenure systems and kinship patterns which
made nonsense of their attempted innovations. The answer seemed
to lie in participatory arrangements, allowing local people to determine
their own priorities and getting them to co-operate with each other
in their achievement. Thanks in part to the work of Oscar Lewis,2
who popularised the theory of a universal cultural gap between poor
Combating Poverty
127
people and the rest of society, the technique was imported to
America’s cities for the War on Poverty.3 The technique was already
known in Europe, paticularly through the work of the Dutch Ministry
of Social Work.5
For many people, this second tradition became the only true
form of community work, as evidenced by basis textbooks such as
Murray G. Ross, Community Organisation, Theory and Principles.5
The two traditions were sometimes differentiated as community
organization the Social Service Council tradition) and community
development (the UN tradition).4 The United Nations provided its
own definition of community development in 1955:
Community Development can be tentatively defined as a process
designed to create conditions of economic and social progress
for the whole community, with its active participation and the
fullest possible reliance on the community initiative.’
Several of the European Programme’s projects conform closely
to this model. The Irish rural projects, with their emphasis on
economic structures, come closest to it, but it also fits urban projects
in Edinburgh, London, Naples and elsewhere.
The Committee and staff of the Irish National Programme still
seemed to see community work polarised between these two models
in their internal disputes in the mid-1970s. A statement from the
programme’s second director to the management committee in 1976
vigorously asserts the primacy of the community development
approach:
It would be very easy. . . to put into effect a programme of
service orientated projects which would simply have the effect
of alleviating poverty, e.g. projects improving residential
facilities for vagrants, meals on wheels, etc . . . They would
being us no nearer to the eventual elimination of poverty. . .
However, it does seem possible. . . to carry out projects which
will, hopefully, bring us a little way towards a society where
poverty will no longer exist. The projects can do this by
beginning a process of social change.
Combating Poverty
128
129
Poverty A lleviation and Housing Problem
The greatest scope for bringing about desired social change is
through the promotion ofparticipation within the local projects
In this way poor people will understand their situation better,
will be better able to articulate their needs and will be better
equipped to press for the satisfaction of their needs . . .
Participation is not only a way towards achieving an end, but
is an'end in itself if one sees poverty as social exclusion.
However, when Jack Rothman came to elaborate his models of
community organisation in 1968/ he identified three models. The
first two were the traditions we have outlined above, which he
christened ‘social planning’ and ‘locality development’. The third,
which he called ‘social action’, was bom of the War on Poverty and
its chief exponent was Saul Alinsky.’ The UN style of community
development had been aimed at securing collaboration between people
and authority, smoothing out conflicts to make way for the march of
progress. Alinsky and his confreres turned the concept of cultural
difference on its head; cultural patterns of poor people could only
behave differently and survive if they could break down the
constraints imposed upon them by the wider social structure His
ideal of cornmi'"^/ work, put forward as early as 1946, is rather
different to tnat of the UN:
A people’s organization is a conflict group. This must be openly
and fully recognized ... A people’s organization is a banding
together of a multitude of men and women to fight for those
rights which ensure a decent way of life . . A war is not an
intellectual debate and in a war against social evils there are
no rules of fair play.
These three models were postulated over ten years ago, and do
not cover all the strategies used in the European Programme of the
mid-1970s. However, it is useful to consider the salient features of
Rothman’s three models put forward at the height of America’s War
on Poverty and at the time when anti-poverty schemes were beginning
to appear in Europe.
Social planning is defined as ‘task oriented’, that is, committed
to achieving certain specific results. The process whereby these
results are achieved is a subordinate consideration. Participation by
the client group may be involved, if this is considered useful. Being
‘task oriented’, social planning projects are often happy to submit to
‘scientific’ evaluation.
The basic assumption of a social planning project is that there
are a number of substantive problems to be solved. The basic strategy
for change is together all available facts on which to work out
rational solutions. Its tactics are fact-finding and analysis. This may
involve conflict with groups opposed to change or it may be achieved
by consensus.
In such a setting the practitioner is a recognized expert,
experienced in manipulating formal systems, particularly interorganisational groups. Normally the sponsors of the project are part
of the established ‘power structure’, whether they are public or
semi-public bodies or major non-govemment organizations. It is a
system of reform from above. The ‘boundaries’ of the project are in
one sense geographical, but they are also usually categorical, in
that the clients are people with particular problems. These problems
are often associated with poverty, but the poor as such are seldom
an operational category. There is no assumption that their needs are
in conflict with the rest of society or vice versa, as in other types of
project. Rothman describes this as an ‘idealist’ approach, believing
that the common good arises from the expert’s exercise of judgement
and conscience. The clients are basically viewed as ‘customers’,
active in consuming services rather than in determining them.
The locality development strategy is, by contrast, ‘process
oriented’. The process of building co-operative relationships and
community structures takes precedence over whatever substantive
reforms are made or services delivered. The goal is to increase what
Murray Ross termed ‘community capactiy’. For this reason there is
a tendency to distrust evaluation directed at assessing ‘results’.
The basic assumption is of a local community overshadowed
by the wider society. The basic strategy for change is to help the
community express its felt needs. The basic tactic is discussion and
communication, with a search for consensus. The practitioner of this
strategy does not push his now technical expertise, he is an expert
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Poverty A lleviation and Housing Problem
‘enabler’ or ‘encourager’ operating mainly through small groups.
He sees the whole community as his client, including the local power
structure. His employer is usually an agency from outside the locality.
The project ‘boundaries’ are geographical rather than categorical,
although there may be a particular attention to certain categories,
such as women (but never men), young people, farmers, and so on.
The practitioner normally sees conflict as damaging, stressing the
compatibility of different interests. His approach is ‘rationalist’, seeing
the common good as arising from discussion and agreement, with a
faith in broadly based representative institutions. The clients are
seen as participants with the practitioner in a common endeavour.
Clearly they suffer from some form of inadequacy or they could do
without the practitioner, but despite all the culture of poverty theories,
the strategy rests on a conception of the client population possessing
certain strengths and energies which need to be focussed and released.
In his concern to address the whole community, the practitioner
often rejects categorising the poor as a group or styling his activity
an anti-poverty project.
The social action project may be task or process oriented. Its
practitioners’ view of society is of a hierarchy of previlege and
power, in which certain groups or areas are deprived or ignored.
The basic change strategy is to defeat the forces which oppress
them; the tactic is organized conflict. The practitioner assumes an
‘advocate’ or ‘activist’ role, with recourse to mass organisation when
necessary. Frequently sheer numbers are seen as the only resource
of the oppressed. The power structure is the enemy. The project
therefore needs an autonomous power base, ideally with the client
group as the employer. The ‘boundaries’ of the project may be
formally defined in geographical terms, but it is difficult to constrain
it geographically for there will be a constant tendency to seek
solidarity with fellow groups in other areas. There is usually no
hesitation in categorising the poor or the working class (or the Fourth
World) as a separate entity—the fear of stigma is replaced by a
search for solidarity.
The assumption of inevitable conflict between interests leads
to a ‘realist’ view in which there is no common good to be unveiled
by the expert or arrived at by honest discussion between men of
Combating Poverty
131
goodwill. Rather, public policy reflects the balance of power in society
at at particular moment. The client population is seen as a victim of
the system, and one school of social action workers places great
emphasis on living among them and sharing their standard of living.
Rothman identifies‘social reform’ as a variant of social action, with
the difference that the practitioners do not operate from within the
victim population.
A Pattern of Projects
The Rothman analysis illuminates many aspects of the European
Programme. For instance in Ireland we can see two social planning
projects, the Social Welfare Allowances project and the Social Service
Councils project. There are five rural projects which conform to the
locality development model, and we can see at least two urban projects
which adhere to the social action model. But the Irish National
Committee at one time or another supported twenty-six projects, so
where do the others fit in?
Rothman himself admits that projects may blend strategies. He
could also add that the dominant strategy may change over time, and
that different practitioners, sponsors and clients with a project may
promote different strategies. Indeed this is the source of a constant
state of tension in many projects. Furthermore projects may choose
to present themselves to the world in different guises. The most
notable example of this is that social action projects frequently do
not have an autonomous power base, and are faced with seeking
support, financial or other, from elements of the power structure
they oppose. Hence the tendency to present themselves to these
audiences as locality development projects with an emphasis on co
operation rather than conflict.
Yet even allowing for this, the Rothman classification as it
stood in 1970 cannot encompass the European Programme. It may
have ben adequate six years after the War on Poverty was launched
but experience in Europe and America since then is difficult fit into
this framework.
There seem to be two major problems. One is that the Rothman
models are all area-based, even though he insist on this only for the
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Poverty Alleviation and Housing Problem
locality development model. But in every case we have the image of
the project leader’s office decorated with a wall-map outlining the
target area with a heavy red line. The experience of the 1970s
however, has increasingly been one of community work with
‘communities’ that have no territorial base, such as single-parent
families, the disabled and so on. This has been linked with a partial
disillusionment with the possibilities of achieving social change on a
local basis, as evidenced in particular by several of the reports of the
Community Development Project teams in Britain in the mid—
1970s.10 Our increased awareness of poverty has also brought home
to us that most poor people do not live concentrated in ghetto areas.
The second problem is that the contrast between social
development and social action presented by Rothman seems too stark,
even though he admits to the existence of ‘hybrid models’. While
many community workers are ready to accept that their clientele are
victims of the social order, the ‘war’ that Alinsky speaks of is waged
very much in the Clausewitz spirit of ‘diplomacy by other means’.
Social action may indeed be a matter of fighting or bargaining
for resources, but given that the power structure is seldom monolithic,
that it has dififerent segments with different interests, the possibilities
for manoeuvre and coalition building may be considerable. The project
often only exists because such a pluralist situation prevails, with
some element in the power structure funding the project to achieve
shifts in the balance of power which it favours.
This more diplomatic style of conflict has been identified by
some commentators as a separate strategy. For instance, the
Community Development Programme inter-project report in 1974'2
spoke of three strategies: consensus, pluralism and structural conflict
(evidently social planning was not considered to be community work).
These three reappeared in 1975 as the traditional, and radical
strategies,13 and in 1978 as the liberal democrat, libertarian and marxist
strategies, with social planning coming back as the conservative
strategy.14 A paper presented to the conference of the Association of
Community Workers in 1979 suggested that a further strategy may
need to be defined, to embrace feminism in community work.13
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We have preferred to attempt a slightly more sophisticated
version of the Rothman analysis, first of all by allowing for each of
his three models to apply to non-territorial communities. Rather than
speak of ‘locality development’, we will call this ‘area community
development’ and place alongside it ‘sectional community
development’. The word ‘group’ would sound more natural, but this
would raise a confusion between group work (i.e. with small faceto-face groups) and community work. Sectional community
development is based on the same collaborative principles, but it
addresses itself to a non-territorial entity. The Gingerbread Clubs for
single-parent families and the Women’s Aid movement for battered
women are examples of this so far as they are concerned with
developing the potential of their members to co-operate for their
mutual benefit. In both these organizations, these are some workers
who would prefer a different orientation, but at the moment the
community development strategy seems to be in ascendance.
‘Social planning’ remains a useful category for analysing the
European Programme, and again we can distinguish, if not with fine
precision, between those which deal with a complex of problems in
a given locality and those which are addressed to the problems of
particular groups which are considered to be similar in many localities.
Obviously there is a spatial aspect to any plan and the plan for a
special group will need to be carried out at particular locations,
usually within the area of jurisdiction or of operations of the
sponsoring agency.
The social action model we can elaborate to include the pluralist
approach and the conflict approach as sub-categories. They are based
on a common realist view of society, but the tactics are different,
particularly in the readiness to form coalitions between the victim
group and other groups in society. Again, social action can be area
or sectional. To take the Irish Programme once again as an example,
the North Centre City Community Action Project is an area-based
project and the National Salmon and Inshore Fishermen’s Association
is a sectional group.
We prefer the term community action to social action, to try to
minimise confusion with the French phrase action sociale, which
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Poverty Alleviation and Housing Problem
covers all interventions in the social field (hence the European
Community’s Social Action Programme), although we recognise that
in French action communautaire often applies to what the
Anglophones call community development.16
The rest if this chapter considers the European Programme
according to the principal strategies employed. In this way we hope
to be able to compare like with like and avoid the bewilderment
which followed several of the cross-project contacts, as in this brief
confrontation between an Irish community action project and an
Italian social planning scheme:
One team member late went to Padu for eight days. She could
see little basis for comparability. Padua was an experiment in
Health Reorganization at the higher administrative level. Its
aim appeared to be more effective and rational use of existing
local government resources. Our aims concern the mobilising
of the resources of the people, and obtaining more resources
from the State for the area as well as the defence of existing
services.1’
SOCIAL PLANNING
Social Surveys
Data collection is an important part of most social planning
exercises, which are usually based on a detailed quantitative
assessment of pre-selected target problems. A survey itself is only
part of a true social planning exercise; the next stage is to
communicate the results to the right quarters and then to mobilise
the appropriate agencies and resources to tackle the situation which
the survey has ‘revealed’.
Combating Poverty
135
The department went on to convene a Belfast Areas of Need (BAN)
Committee, with representatives of all the statutory services whose
responsibilities seemed relevant to the problems uncovered by the
research, from which flowed host of further actions, including another
action in the European Programme.
In the Republic, the Irish National Programme included a major
survey into the operation of the Social Welfare Allowances Scheme
introduced by the government in 1977. This involved a study of
recipients of the previous scheme and interviews with officials
responsible for carrying out the old and the new systems.
Unfortunately, the results had still not been published at the time of
writing.
An effective follow-up to this work might well have been to
convene a meeting with the Department of Social Welfare to consider
the shortcomings of the present scheme and to organize the appropriate
responses, e.g. training courses for Superintendent Welfare Officers
or better information services. This now seems unlikely to occur.
A major voluntary organization, the Society of St Vincent de
Paul, was assisted by the National Committee in conducting a survey
both north and south of the border into the housing conditions and
social relationships of old people living alone. This was expressly
done as a basis for developing future actions by the Society. The
survey was published in October 1980.
The ASSN-BAN project, embracing a wide range of problems
in a given area, is a classic example of area social planning. In
cortrast, the SWA and the St Vincent de Paul projects present a
nationwide approach focussed on very specific issues.
Area Social Planning
The Areas of Special Social Need (ASSN) project in Belfast is
a very good example of survey data being put to use in this way.
The first part of the project included in the European Programme
concerned only the survey into the distribution of needs and services
in the city, conducted by officials of the Northern Ireland Department.
The action did not, however, end with the publication of the results.
By far the largest project in the European Programme was the
area social planning exercise at Padua. This bold, imaginative and
expensive project run by the local comune involved the reorganization
of the entire health and social services of a city of250,000 inhabitants.
The objective was to achive an integrated but decentralised pattern
of services open to all citizens on a non-categorical basis, with an
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Poverty Alleviation and Housing Problem
emphasis on preventive care, aims which reappeared in different
forms in all the other social planning projects in the European
Programme, like these others, Padua also had a strong bias against
residential institutions and in favour of domiciliary care.
The inter-organizational linkages entailed by the project were
manifold, including an extensive range of public services at city,
provincial and national level and several voluntary social welfare
organizations. Attempts to build in citizen participation through the
neighbourhood councils were, however, largely unsuccessful.
Although the project had participation as one of its aims, its failure
to achieve this was regarded by the project workers and the
authorities as of relatively minor importance, in comparison with its
other achievements. This underlines the difference between social
planning and the other strategies employed in the programme.
For all that the Padua project was all-embracing as regards the
civic health and social services, it was very specific to its locality.
The main impetus came from a reforming group of local councillors
and senior officials who were only incidentally interested in setting
up a model for the rest of Italy. They have indeed been happy to
share their experiences, but Italy already has a variety of models for
municipal reforms and it is unlikely that a standard pattern will
emerge.
Sectional Social Planning
The COPES project in the 14th Arrondissement of Paris,
although more localised than the Padua project, was specifically
intended as a model for the rest of the metropolis, as well as to
inform government policy throughout France. COPES, the small
research team which concluded the contract with the Commission,
was only the consultant to the main experiment, the Secteur Unified
Enfance. For sometime, the government had been attempting to secure
greater co-ordination between the various agencies involved with
the protection of children without adequate parental care. Prior to
the experiment in the 14th Arroundissement, these efforts had all
been at the departement level. The COPES project experimented
with a much more local level of coordination in a sector of Paris, as
Combating Poverty
137
well as trying to exploit the more integrated pattern of service to
develop a system of preventive care. The COPES team showed little
interest in general conununity involvement in the SUE, but devoted
the bulk of its energies to educating the professional workers, child
minders and foster parents who were to work for it. This education
was designed to put across certain technical concepts, although it
used discussion groups rather than formal lectures as its main
techniq io.
Alongside this social planning work, however, COPES included
a small venture in community development, helping a tenants’
association to set up its own part-time creche and day nursery. Two
different strategies were being employed in the same project, even if
the second strategy was confined to a relatively minor sideline.
The project run by ARIM-PACT in central Brittany was a
similar piece of multi-agency co-ordination to assist a particular
problem group. The perceived problem here was that many elderly
inhabitants of the thinly populated rural area were brought into
residential care mainly because of indequate housing. The answer
proposed, based on two pieces of survey work, was to launch an
integrated programme {action programme) of sheltered housing,
house improvements, home help and home nursing services, a
collective laundry service and a network of old people’s clubs. The
latter, once established, were drawn into the planning of the rest of
the exercise. Participation was a success in this project, and it made
a significant contribution to the achivement of the project’s other
goals (e.g. it publicised the projects’ schemes, identified potential
beneficiaries and persuaded reluctant householders to accept home
helps and house improvements), but it was still not crucial to the
general successor of the project, which was judged by the amount of
finance it mobilised and the number and quality of its house
improvements and grouped dwellings.
We can also number the PACT project in Orange as a social
planning project, a plan which unfortunately did not get much beyond
the paper stage by 1980. This again was concerned with the housing
problems of deprived groups.
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Poverty A lleviation and Housing Problem
Germany presents two interesting examples of social planning
projects which eventually moved on to other strategies. The StuttgartTubingen project began as a consultancy arrangement between a
university research team and a group of six residential institutions
for vagrants at different localities in the Baden-Wiirttemberg region.
The work initially involved the application of theories of social
development in small autonomous groups to the internal organization
of the institutions. From this the team became involved in organizing
preventive care (basically, flats for homeless men) and then to
community development with a group of town tramps. This was
more central to the team’s work than the day nursery was to COPES,
but the project remained fundamentally a social planning exercise.
The fact that the team developed a trenchant critique of the economic
and social system which was creating, the increasing number of
vagrants does not invalidate this. All the social planning projects in
the European Programme have set out strong criticism of those aspects
of society they wish to change. Nor are they above criticising the
socio-economic system at large, even though they depend upon
powerful elements within it (e.g. ASSN squarely indicts
unemployment as the main cause of social deprivation).
The Cologne project made a far more radical move, turning in
its last years principally to the community action strategy. The project
began with a small independent research agency acting as consultants
to the municipality on the improvement of its social assistance
services, exploring their adequacy through social surveys in two
contrasting areas. A move to a further stage of social planning, the
provision of advice centres, was short-lived. In its place the team
became heavily involved with the local welfare rights group and
went on to help eastablish other groups throughout the North RhineWestphalia region. This is an example of a project which went
through two distinct phases, using community work strategies at
opposite ends of our spectrum.
COMMUNITY DEVELOPMENT
This is mainstream community work, once described by a senior
government minister in Britain as a community pulling itself up by
its own bootstraps. The phrase was used in relation to the Community
Combating Poverty
139
Development Project 1968-78, several of whose twelve components
were later to develop a marked community action stance. The drift
towards community action was apparent in several of the European
Programme’s community development projects, although use of this
strategy was sometimes only peripheral and transitory. At times, co
operation just does not seem to work.
Since community development was the preferred strategy of
the majority of the project of the European Programme, we cannot
analyse each example in this section. Instead, we take some leading
examples, looking in particular at the blending of strategies.
The five rural projects in western Ireland are the clearest
examples in the European Programme of community development
work of the traditional type, with its emphasis on economic co
operation and self-help, even though the National Committee baptised
them the Community Action Research Project. Nonetheless, there
was some recourse to community action, particularly with the dispute
over fishing rights in Beara. This resulted in a specfic community
action project being launched with the National Salmon and Inshore
Fisherment’s Association.
Edinburgh was the home of two projects, one in name and fact
a community development project and the other largely so. The Social
and Community Development Project (later renamed the Urban
Regeneration Programme—shortly before taking a rural component!)
was run jointly by the regional and city councils. It was intended as
a means by which the councils could relate to local communities as a
whole, rather than as consumers of specific services, and work
through community groups to resolve problems which the groups
themselves identified. Since all the project workers were officials of
the two councils, which were the dominant elements in the local
power structure—being the major landlords as well as the political
authority—they were not in a position to organize the people to
contest the power structure. Their main purpose was to develop a
constructive dialogue which could replace conflict. As one worker
expressed it: ‘We teach them to roll up their banners and sit down
and talk’. But she went on to add, ‘there are times when we have to
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Poverty A deviation and Housing Problem
say that we can’t do any more for them and if they want to carry
the matter further they will have to fetch their banners out and
march’.
The Craigmillar Festival Society, having an indigenous
leadership, even if paid from local authority grants, had no such
scruples. It was nonetheless primarily a community development
project. This was very much the image put across on a one-hour
programme produced by CFS and shown on national television in
September 1980. CFS exploited whatever government aid was
available, adding it to the voluntary efforts of local residents to
improve the culture life, social services and economic well-being of
its people. Hence an impressive array of old people’s clubs,
workshops, a family group home, a thrift shop, crafts centre, and so
on. Despite this, CFS could not at times shirk pressure-group tactics.
For instance, with the local authority as the major landlord, there are
obvious conflicts of interest over repairs. Yet the fundamental
reconcilability of interests is recognized in the CFS objective of
shared government to which the Craigmillar Comprehensive Plan
was offered as a contribution.
The Marolles project in Brussels had obvious similarities with
Craigmillar, an affinity which the project workers themselves sensed
(they made brief cultural exchanges). Most of Craigmillar’s activities
had a parallel in the Marolles—cultural activities, although with a
more cosmopolitan tinge, social service work and small-scale
economic enterprises. Yet the Belgian organization called itself the
Marolles Action Committee and was bom of a confrontation between
the residents and the local authority over the redevelopment of their
area. It started off with community action, which it never abandoned,
and yet moved heavily into community development. There remained
a strong sense in the project that their ;people were a victim group.
Since a large proportion are immigrants, they are literally
disenfranchised. Rothman would doubtless call this a project using
hybrid strategies.
Having an organizational link between projects by no means
entails common strategies, as the Irish Programme illustrates. The
three Area Resource Centres in the UK were united in a common
Combating Poverty
141
technique: the provision of seed-money, organizing skills, technical
advice and practical services to small local groups, but the strategy
furthered by this technique varied according to the groups the centres
encountered and which they chose to assist. The London ARC can
perhaps be seen as the most developmental and the South Wales
Poverty Action Committee as the most action-oriented.
The seven Family Day Centres were primarily community
development enterprises, but they included the action-oriented ATD
project. Two of the PACT projects were social planning exercises,
but the third (Roubaix) was largely a community development project.
The Giugliano project near Naples is interesting for the contrast
it presents with Padua. Both concerned a similar range of services,
with a similar emphasis on decentralisation, integration, preventive
work and conununity care. However, Giugliano took a developmental
approach, working with the inhabitants to develop common priorities
in health care. Participation was central to the project, which engaged
in a variety of consciousness-raising activities through cultural events,
work in schools, and so on.
The project also saw itself as a centre from which to spread a
widening circle of community awareness and participation. For
instance, its school social workers managed to move from individual
counselling for ‘problem’ pupils to regular classroom teaching and
organising field visits (e.g. to sweated labour workshops) and student
projects (e.g. attitude surveys on equality between the sexes).
To end this section, it is worth citing one project among several
where there were internal differences over the appropriate strategy.
The Women’s Aid movement in Britain has for sometime been
divided between those members who prefer to concentrate on bringing
women together to set up and run refuges for the victims of family
violence and those who press for it to be involed in wider campaigns
for justice between the sexes. The rift was reflected in the Women’s
Aid project in Dublin, where the two workers provided by the
National Committee met with little success in their attempts to involve
their fellow workers in wider concerns.
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COMMUNITY ACTION
The essense of community action is a ‘them and us’ analysis of
society as a contest for power, whether the ‘them’ and ‘us’ arises
from a marxist class analysis, a feminist analysis, or any other analysis
that opposes the interests of an under-privileged group against that
of a power structure. As even the author of the Society of St Vincent
de Paid survey of tjie elederly in Ireland observed:
We are living in an era when most groups who share common
interests and needs have banded together in their quest for
rights, self-protection or self-advancement. It has become a
measure of the deprivation of any group that it has no
organization or representatives to speak on its behalf. The old
and alone have no organization and no one to speak for them.
Largely forgotten in a society where it has become essential
for any group to make itself heard before it can attain even its
most just demands, they contrive to make the best of what they
have got.1'
Several projects in the European Programme have identified
strongly with the struggles of a particular group for a better place in
society. In most cases they have preferred a pluralist approach,
mixing war and diplomacy. Some have been more ready than others
to engage in direct conflict but it is difficult to rank who is the most
or least likely to do so—the approach varies with time and place and
between workers. The distinguishing feature is the identification
with a victim group and the focus on its relationships with the rest of
society, rather than its betterment through mutual aid or public
planning. As the Cork City project team phrased it:
Our main objective is . . .to engage local people around certain
key issues in an action research way, which leads them to
increasing awareness of their rights and of the nature and
operation of the social system and leads them to organization
for change.
Aid aToute Detresse
The ATD movement, which ran six projects in the European
Programme (four in France, one in the Netherlands and one in the
Combating Poverty
143
UK) had the most elaborately articulated theory of a victim group,
which it termed the Fouth World to symbolise its exclusion from
the rest of affluent western society. The Fourth World is the sub
proletariat, the people who exist on the fringes of the labour market
excluded from the main structures of economic, political and social
life. While other projects tried to avoid ‘stigmatising’ the poor, ATD
tried to teach its Fourth World a militant self-consciousness.
The Fouth World was ‘discovered’ in the bidonville of Noisyle-Grand near Paris in the early 1950s. It was easy for workers and
residents in the encampment to equate their situation with that in the
other bidonvilles thrown up in the prolonged housing shortage in
France in the 1950s and 1960s. ATD’s theoreticians went beyond
this to include in their concept of the Fouth World the groups from
whom the bidonville residents were drawn and to postulate the
existence of this ‘layer’ in all advanced industrial societies. While
ATD’s French projects still mainly deal with families living in housing
complexes specially created for those who are unacceptable in any
other accommodation, the Dutch project works with families in normal
housing, as does the London project, although many if its clientele
were first known to ATD when they lived in temporary
accommodation.
In one sense the Fourth World’s leadership is indigenous, for
the founder was a priest from a Fourth World background, but the
personnel of the movement were drawn mainly from the middle
classes, as were most of its ‘allies’ (a body of sympathisers who
contributed voluntary help, subscribed to the movement’s literature
and attended Fourth World evenings). The movement was not,
however, professionalised; not that it rejected professional expertise,
but it did not offer a career structure with the usual professional
rewards. Workers were expected to live among the Fourth World
and share their standard of living. Some made this a lifetime
commitment while others used it as an interlude in their outside
careers. The movement always asserted the value of indigenous
leadership, and put much energy into training a cadre of Fourth
World militants, but the militants are still a long way from taking
charge of the organization.
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Combating Poverty
Much of the projects’ activity can be described as consciousness
raising. Indeed, almost all the activity of the London project came
under this heading. It provided no direct services (except incidentally,
in that its meetings were a social event for the participants) but
devoted itself to organizing Fourth World evenings to discuss social,
moral and economic issues.
The continental projects certainly did offer services. For
instance, the pre-school programme in France was a well—organized
service of high professional calibre. Yet the Fourth World evenings
remained inportant and, in the minds of the workers at least, all the
services were devoted to the end of liberating their users. For instance,
the pre-schools not only set children on the path to better school
achievement and hence literacy and greater effectiveness in society,
but were a means of contacting the parents, a focus around which to
organize them, and a base from which parents could venture into
other fields, for instance, joining the nursery school parents
association. The pre-school teachers were also a pressure group for
making the nursery schools more responsive to Fourth World needs.
The outside observer cannot avoid sensing a contrast between
the militant rhetoric of ATD’s literature and its national and
international rallies and the apparently non-contentious content of its
services. The ATD pre-school programme draws heavily on the
American Head Start experience (the author has sat in on classes in
both programmes, which showed a marked similarity) which was
the least controversial element in the War on Poverty. The Communist
municipality in Reims, which saw ATD’s ideology as a move to
split the working class, was nevertheless able to support ATD
financially for its ‘social work’. It was a paradoxical revolutionary
movement which found time to teach two-year olds to identify colours.
ATD’s work at national level has already had some positive
impact—Le Quart Monde is now a recognized term in France, and
was used frequently at the Habitat et Vie Sociale conference in
Paris in 1980. The HVS programme, which included four projects in
the European Programme, is a large-scale government inspired social
planning scheme with a strong community development component.
That many conference participants were concerned to take the Quart
Monde into account is a tribute to ATD’s propaganda.
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Other Action Projects
More familiar types of protest-oriented community action groups
could be found in North Dublin, Cork and South Wales. The
NCCCAP project in north Dublin was the only project known got
be involved in an infringement of the law. Several management
committee members were fined for blocking a street during the rush
hour and one was subsequently imprisoned for two days for refusing
to undertake ‘to keep the peace’. This was in connection with protests
against the city corporations’s redevelopment plan for the project
area.
NCCCAP shared the distrust common to many social action
groups for developmental activities such as playgroups, job creation
schemes, advice centres or youth work, although it eventually under
took a number of pre-vocational training schemes for young people.
The South Wales Poverty Action Committee (SWAPAC) was
similarly disdainful of helping the poor ‘administer their own poverty”
and acting as the ‘handmaiden of the state’. Its attitude to worker
coperatives vacillated, crystallising in feeling that they were
mechanisms for the poor ‘to exploit themselves’, that is, they were
just another way of orgnizing low-paid labour to keep the capitalist
system moving.What SWAPAC found more promising was to
organize pressure groups, build liaisons with the trade unions and
undertake welfare rights work.
The fear of being subverted into a community development
project is characteristic of many community action enterprises.The
experience of the European Programme is, however, that activities
rejected on strategic grounds by some community action projects
were quite congenial to others. Pre-school work, for instance, does
not inherently belong with any particular strategy for social change;
it depends on how the activity is conducted and for what wider
purpose. Almost any activity can be a learning activity for the
community.
Welfare Rights
This is a tactic, not a strategy, and can be used by projects of
all orientations. Padua instituted advice units in its local centres,
several family day centres in England gave rights advice, the first
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Poverty Alleviation and Housing Problem
director for the Irish Programme did not feel that welfare rights
fitted in with community action programmes, and the Cologne team
turned to rights groups when it entered its community action phase.
Much of the problem that community activists have with rights
work is that it involves specialist knowledge which is not the stockin-trade of the usual community worker, nor is it readily available in
the victim group—this is part of their victimisation. Community
workers are also wary of work with individuals, which they feel is
the social caseworker’s province, though the Free Legal Aid Centre
in Dublin and the Tribunal Representation Unit in Wolverhampton
found it compatible with very community oriented projects. The
Belfast Welfare Rights Project was ostensibly a social planning
exercise with a precise pre-determined brief to collect data on the
operation of the income maintenance system as a follow up to the
ASSN-BAN project. It was to some degree also a cover for a
community development project. The well-founded distrust of outsiders
in the inner-city neighbourhoods of Belfast obliged the project to
operate through local community groups, who used the information
bureaux they were paid to set up as all-purpose community advice
units. The arrangement worked to the satisfaction of all parties,
although the local workers did not succeed in getting further funds
to continue with their advice units.
In America this is sometimes called the ‘Indians and blankets’
approach—the American Indians wanted blankets and the missionaries
to teach religion, so the result was a missionary trading post.
GROUP-WORK
At least two of the project did not profess community work aims.
They wre intested in helping individuals with personal difficulties,
not through social casework, but by means of group-work activities.
The Copenhagen project was specifically directed at individuals who
fall through the net’ of the welfare state. It concentrated on nine men
with chronic problems of unemployment and alcoholism, trying to
re-establish them as adequately functioning citizens. Quite
unexpectedly, the group evolved into an informal producers’ co
operative, going on from refurbishing their own residential unit to
conducting a city-wide business in renovating old doors and furniture,
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Combating Poverty
rather like the small production units in some of the community
development projects. The social work team also made a film of their
work which was shown on national television, which led them to see
their project as helping to change the image of down-and-outs in
society. Even such small exercises in group therapy tended to move
in a community work direction.
The Camden Drop-In was another therapeutic exercise with a
small face-to-group. It was run by a social casework agency, the
Family Service Unit, and most of the group’s members also received
traditional casework services. The group never got as far as setting
up its own business, although it did cook its own meals.
Several other projects, for example the Liverpool Clubhouse
and the Family Groups Unit (LVSC), mixed group-work and case
work along with community work activities. On the whole, however,
projects in the European Programme were less concerned to provide
better therapy for inadequate individuals than to change systems.
CONCLUSIONS
The number and diversity of activities in the European Programme,
while a major headache to the evaluators, provide a fascinating
picture of the range of strategies in contemporary community work.
The simple dichotomy which some observers still see between service
strategies and ‘influential’ strategies does not hold in this
programme,” almost all of whose components provided services.
The European Programme does not demonstrate the value of
one strategy above others. Rather, the experience suggests there is
no one best way in community work. Large-scale planning through
bureaucratic structures will remain essential for social progress in
Europe for the foreseeable future. We are unlikely to return to an
exclusively communal neighbourhood basis for our social and
economic lives. At the same time, there is a need to bring economic
and social service structures closer to the people, not just by
decentralising the large organisations, but by enabling people to
participate directly in those structures which govern their lives. This
would go some way to relieving the powerlessness of the poor.
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Poverty A deviation and Housing Problem
However, given that major decisions on the economy, the welfare
system, and so on, will continue to be taken at city, national and
international levels, there will always be a place for actions to secure
that the interests of the poor are taken into account, if necessary by
making life uncomfortable for the rest of us.
,
1.
Combating Poverty
9.
O.Lewis, Five Families: Mexican Case Studies in the Culture of
Poverty, New York, Basic Books, 1959. Lewis whose work was
based on recent migrants to Mexico City and New York, always
denied that he put forward the culture of poverty as a universal
phenomenon, but it was widely interpreted as such.
3.
E. James, America Against Poverty, Routledge and Kegan Paul,
1970.
4.
G. Hendriks, Community Organization, Ministry for Social Work,
The Hague, 1964. This is a collection of lectures given between
1959 and 1963, mainly to international audiences. It mcludes a
paper given to an EEC seminar in 1960 proposing a programme
of pilot schemes in community work.
5.
M.G. Ross, Community Organization, Theory and Principles,
Harper and Row, 1955.
6.
This terminology is confusing as American schools of social
work never abandoned the term community organisation as a
general term for all types of community work.
7.
United Nations, Social Progress through Community Development,
New York, 1955.
8.
J. Rothman, Three Models of Community Organisation Practice,
National Conference on Social Welfare, 1968, reproduced in
Strategies of Community Organization, edited by F.M. Cox, et
al., Illinois, Peacock Publishers, 1970.
The British Community Development Project (1968-78) is an
example of an attempt to emulate the American locally based
approach which was rejected after a few years by many of the
programmes’ own practitioners.
11.
Community Development Project, The National Community
Development Project Inter-Project Report, CDP Information and
Intelligence Unit, 1974.
12.
H. Rose, and J. Hanmer, ‘Community Participation and Social
Change’ in D. Jones and M. Mayo (eds.) Community Work Two,
Routeledge and Kegan Paul, 1975.
13.
2.
S. Alinsky, Reveillefor Radicals, Chicago University Press, 1946.
Alinsky’s views, formulated as early as the 1930s, envisaged a
form of trade union, or ‘people’s organization’ to confront the
power structure in every poor district
10.
Notes
Definitions of community work (or community organisation as it
is termed in America) are legion. For instance, E.B. Harper and
A. Dunham in Community Organisation in Action: Basic
Literature and Critical Comments, (New York, Associated Press,
1959), listed 13 definitions of community organization and
indicated that 50 to 100 definitions had been put forward in the
previous 35 years. The expansion of community work in the
1960s and ‘70s has added enormously to this wealth of definitions.
149
J. Smith, ‘Possibilities for a Socialist Community Work Practice’
in Towards a Definition of Community Work, Association of
Community Workers, 1978.
14.
J. Hanmer, ‘Theories and Ideologies in British Community
Work’, Community Development Journal, Vol. 14, No 3, 1979.
See also three articles in Community Development Journal, Vol
15, No. 2, 1980: M. Loney, ‘Community Action and Anti-Poverty
Strategies; Some Transatlantic Comparisons’; J. Higgins,
‘Unlearnt Lessons from America’; and P. Shanahan, ‘Negotiating
the Definition of Community Work in Rural Ireland: A Descriptive
Analysis of Three Interventions’.
15. This fits in with the definition of Community Action accepted by
the Boyle Committee in 1973 in its report on ‘Current Issues in
Community Work’ which was the starting point for the Area
Resource Centres project. The Committee quoted from a
contemporary article in the British Journal of Social Work (R.
Bryant, Vol. 2, No. 2, 1972):
‘Community action may denote a particular approach to
organizing local groups and welfare publics; an approach in which
the political importence or powerlessness of these groups is
defined as a central problem and strategies are employed which
seek to mobilise them for the representation and promotion of
their collective interests. ’
16.
NCCCAP report to Irish National Committee, 1979.
150
Poverty A lleviation and Housing Prob lent
17. B. Power, Old and Alone in Irland, Society of St Vincent de
Paul, Dublin, 1980.
18. For instance, S. Hatch, Outside the State, Croom Helm, 1980;
and H Butcher et al., Community Groups in Action, Routledge
8
and Kegan Paul, 1980.
The Poverty Rediscovered
When Americans “Rediscovered” poverty in the early 1960s, social
scientists were appalled to realize how little they knew about it. The
economist Kenneth Boulding lamented that knowledge of poverty
was “scanty”. The sociologist Daniel Bell recalled, “when the poverty
issue arose, nobody was really prepared, nobody had any data, nobody
knew what to do.”
Social scientists also bemoaned the paucity of serious studies
that might assist welfare policy-makers. A sociologist complained
later, “During the 1940s, the 1950s, and the first few years of the
1960s, the topic of poverty was virtually non-existent in the
sociological literature.” Two students of welfare concluded in 1963:
“It is not known for certain how many [on relief] have the basic
external and internal resources to become self-sufficient in a short
time with just a little temporary aid, how many when provided with
a number of external socio-cultural and economic resources can make
a go of it, or how many, regardless of assistance, will find it difficult
to move into the mainstream.”
Tliis imperfect understanding reflected a benign neglect of the
scattered data on the subject during the 1040s and 1950s. If these
years had been as prosperous as many contemporaries believed, this
neglect would not have mattered much, but in the late 1950s,. a host
of social problems remained, with poverty affecting nearly 40 million
people, or one-fifth of the population. The majority of these poor
people received little help from a welfare system that was less
generous and comprehensive than those of western Europe.
This benign neglect of poverty and welfare exposed the
readiness of Americans, once prosperity returned in the 1940s, to
210 The Development Dictionary
Natality and Family Planning, edited by John F. Marshall and Steven Polgar,
Chapel Hill, N.C.: University of North Carolina Press, 1976, pp. 167-83 and Lucile
F. Newman (ed.), Women's Medicine: A Cross-Cultural Study of Indigenous Fertility
Regulation, New Brunswick: Rutgers University Press, 1985. The most useful re
cent literature includes Gisele Maynard-Tucker, 'Knowledge of Reproductive
physiology and Modem contraceptive in Rural Peru', in Studies in Family Plan
ning, Vol. 20, No. 4 (July/August 1989), pp. 215-24. Christa Wichterich, 'From the
struggle against "Overpopulation" to the Industrialization of Human Production',
in Reproductive and Genetic Engineering, Vol. I, No. 1 (1988) pp. 21-30, calls atten
tion to the 'racist eugenic and patriarchal tradition' inherent in the perception of
the 'population catastrophe'.
Poverty
Majid Rahnema
Destitution, or imposed poverty, no doubt hurts, degrades and
drives people into desperation. In many places, hunger and misery
cry out to heaven. Indeed, few development concepts find their
proof in such a glaring reality. Yet poverty is also a myth, a construct
and the invention of a particular civilization.
There may be as many poor and as many perceptions of poverty
as there are human beings. The fantastic variety of cases entitling a
person to be called poor in different cultures and languages is such
that, all in all, everything and everyone under the sun could be
labelled as poor, in one way or another. The list could include not
only the weak, the hungry, the sick, the homeless, the landless, the
crippled and the beggar; not only the mad, the prisoner, the en
slaved, the fugitive, the exiled, the street vendor and the soldier; not
only the ascetics and the saints, but also all the losers of the world,
including the millionaire after the crash of the stock exchange, the
fired executive and the artist who finds no buyer for his works.
Many Perceptions, Countless Words
World languages compete with each other for the number of words
referring to the stations and conditions associated with the different
perceptions of poverty.
In Persian, for instance, there are more than 30 words for naming
those who, for one reason or another, are perceived as poor. In most
African languages, at least three to five words have been identified
for poverty.1 The Torah uses eight for the purpose.2 In the Middle
Ages, the Latin words covering the range of conditions embraced
by the concept were well over forty.3 To this impressive variety of
212 The Development Dictionary
words found at the national or dicuonary level, many more should
be added from the corresponding dialects, slang or colloquial ex
pressions used at the vernacular level. A whole universe of insights
into the murky depths of poverty is to be explored in the many
thousands of related proverbs and sayings.4 In most cases, it is ex
tremely difficult for the outsider to grasp the full meanings and
nuances of all those words and expressions, let alone to translate
them into other languages.
For long, and in many cultures of the world, poor was not always
the opposite of rich. Other considerations such as falling from one's
station in life, being deprived of one's instruments of labour, the loss
of one's status or the marks of one's profession (for a cleric, the loss
of his books; for a noble, the loss of his horse or arms), lack of
protection, exclusion from one's community, abandonment, infir
mity, or public humiliation defined the poor. The Tswana people of
South Africa recognized their poor by their reactions to the appear
ance of locusts. Whereas the rich were appalled lest the locusts ate
the grass needed by their cattle, the poor who had no cattle rejoiced
because they could themselves eat the locusts.5
In Europe, for ages, the pauper was opposed to the potens (the
powerful), rather than the rich. In the 9th century, the pauper was
considered a free man whose freedom was imperilled only by the
potentes. In the texts of peace movements of the 11th century, the
pauper had become the inermis who had to respect the force of the
soldiers, the miles. The word, poor, could be applied to the owner
of a little alleu (a tax-free property), a wandering merchant, and even
to any non-fighter, including the unescorted wives of knights.6 On
the whole, the poor were quite respectable persons who had only
lost, or stood in the danger of losing, their 'berth'.
In that same period in Europe, a whole new category of poor
appeared on the social stage—the voluntary poor who chose to
share the life of the destitute and the berthless. For these, living
poorly was a sign of elevation rather than degradation.7 Respect and
admiration for the voluntary poor had, of course, always existed in
Eastern traditions.8
It was only after the expansion of the mercantile economy, the
processes of urbanization leading to massive pauperization and, in
deed, the monetization of society that the poor were defined as lack
ing what the rich could have in terms of money and possessions.
A common denominator for most perceptions of poverty remains
Poverty 213
the notion of 'lack' or 'deficiency'.9 This notion reflects only the basic
relativity of the concept, for a utopian 'complete man' would not be
lacking anything. Besides, when poor is defined as lacking a number
of things necessary to life, the questions could be asked: What is
necessary and for whom? And who is qualified to define all that?10
In smaller communities, where people are less strangers to one an
other and things are easier to compare, such questions are already
difficult to answer. In a world of the mass media, the old familiar
horizons and communally defined bases of comparison are all de
stroyed. Everyone may think of themselves as poor when it is the
TV set in the mud hut which defines the necessities of life, often in
terms of the wildest and fanciest consumers appearing on the screen.
In the same way, the ambiguity of the concept takes on new pro
portions as the old familiar horizons fade away. There was nothing
ambiguous about the pauper who lived on what he earned from
some humble trade in his village, notes Mollat.11 'His face was fa
miliar, and despite his misfortune he remained, in his suffering, a
member of the social group.' Ambiguity starts when one crosses the
vernacular boundaries. Are these strangers rebels, vagabonds, dis
ease carriers, really poor or genuinely ill? Are they saints or sinners?
These questions not only deepen our ignorance about who the poor
really are, but face us with serious cognitive problems as to what
people are actually thinking.
Four Dimensions of Poverty
1. The materialities: The facts or materialities on which the various
constructs of poverty are based are those 'things', the lack of which
is perceived as poverty. These lacks, deficiencies, or deprivations are
either of a non-material and existential kind, or of a material nature.
To the first category belong such factors as one's inability to meet
one's end, lack of good fortune or self-confidence, not being re
spected or loved by others, being neglected or abandoned, etc. As
to material factors, these could include discrimination, inequality,
political or other forms of oppression and domination, absence of
entitlements,12 non-availability of the minimum of 'necessaries'13 re
quired for economic or biological survival, as defined by one's par
ticular culture; also, all other forms of deprivation, destitution,
Poverty 215
214 The Development Dictionary
hunger, malnutrition, homelessness, ill health, and exclusion from
educational possibilities, etc.
Although the materialities referred to are relative to various so
cieties and cultural spaces, it could be argued that: 'There is an ir
reducible core of absolute deprivation in our idea of poverty, which
translates reports of starvation, malnutrition and visible hardship
into a diagnosis of poverty, without having to ascertain first the
relative picture'.14 ’
2. The subject's own perception of his condition: The materiali
ties referred to are indeed essential to the understanding of poverty
in its different perceptions. Yet none of them should be confused
with the concept itself. It is only when one or a combination of these
materialities is perceived by' a subject as an expression of poverty,
that they acquire the particular meaning attached to that word. And
that perception is quite a personal and socio-cultural affair. It is, in
fact, part and parcel of the subject's wider perception of the world
and his place in it.
It has been noted that the poor—leaving aside voluntary mendi
cants—tend generally to attribute what they lack to conditions inde
pendent of their will and beyond their control—whether defined by
metaphysical causes such as God's will, one's karma or qismat, or the
unjust constitution of society. Their perception of the deprivations
from which they suffer is also often aggravated by the feeling that
they lack the necessary ability to overcome their condition.
The lack of particular material means is not, however, always
perceived in negative terms. The case of the mendicants in medieval
Europe, already referred to, is not the sole exception. For the Iranian
sufis, the Indian sanyasin, and some contemporary schools of
thought, such as the Gandhians, to be free from alienating material
possessions is a blessing indeed, and an opportunity for reaching
higher forms of riches. The Prophet of Islam has been widely quoted
as saying: 'Al faqro faxri' [Poverty is my pride and glory].
It remains true, however, that the destitute and materially de
prived generally perceive their predicament in negative terms.15
Even when they attribute their condition to metaphysical or onto
logical reasons, they spare no effort in trying to put an end to their
deprivations, if necessary through violence. Often, they tend to es
tablish relations of dependency with more powerful persons,
groups, faiths or ideologies, a relationship which gives them an in
ner feeling of security and, sometimes, of false strength.
3. How the others view the poor: The poor's perception of their
predicament is inevitably affected by how others view them. The
two perceptions are seldom identical.
Poverty is sometimes perceived as a virtue by others when it
represents a free choice on the part of those subject to it. Otherwise,
the poor are generally looked upon with feelings ranging from em
barrassment to contempt and even violence. On another plane, while
pauperism16 was perceived as abnormal and calling for remedial
action, poverty in vernacular and pre-industrialized societies was
considered, by contrast, as a rather natural human predicament, if
not an irremediable and unavoidable fact of life.
Different views of the poor have led to basically two types of
reaction. The first represents a variety of forms of direct or indirect
intervention, based on social, cultural or ethical reasons such as
charity, assistance, education, confinement, repression, etc. The sec
ond is grounded on philosophies of non-intervention, either justified
by the belief that nothing should be done for the poor for they some
how deserve their condition, or on the assumption that nothing can
be done, for all forms of intervention ultimately produce negative
results, or no change at all, in their lives.
4. Spimes (socio-cultural space-times) affecting various percep
tions of poverty: While the above dimensions are mutually interac
tive in shaping the construct of poverty, they are all, in turn, affected
by the space-times to which they belong. This explains why, in dif
ferent communities and at different times, the same materialities are
perceived differently, both by those referred to as poor and by soci
ety at large. To take an example, Helena Norberg-Hodge mentions
how the notion of poverty hardly existed in Ladakh when she vis
ited that country for the first time in 1975. 'Today,' she says, 'it has
become part of the language.' When visiting an outlying village
some eight years ago, Helena asked a young Ladakhi where were
the poorest houses. 'We have no poor houses in our village,' was
the proud reply. Recently, He ena saw the same Ladakhi talking to
an American tourist and overheard him say, 'if only you could do
something for us; we are so poor!'17
The Global Construct
Global poverty is an entirely new and modern construct. The basic
1'overty 217
materials which have gone into deconstruct are essentially the
economization of life and the force rcn integration of vernacular so
cieties into the world economy.
In one of its first reports in 1948, the World Bank closely corre
lates the problem of global poverty with countries' gross national
products. It postulates that countries with an average per capita in
come of less than $100 are, by definition, poor and underdeveloped.
It expresses the responsibility of the richer nations, the richest of
them being the United States, to help the poor countries raise their
living standards.
Thus, for the first time in history, entire nations and countries
came to be considered (and consider themselves) as poor, on the
grounds that their overall income is insignificant in comparison with
those now dominating the world economy. Consequently, national
income was introduced as a new global measure for expressing the
various stages of economic development, the latter process being
proposed as the final answer to poverty.
On another plane, the new construct no longer embraces the view
that poverty is a multi-faceted human predicament. It considers it
as a single pathological phenomenon of universal character, but par
ticularly acute in pre-economized societies. Following a consensus
reached amongst the world elites on the diagnosis of the disease
(underdevelopment and lack of income,) as well as its cure (econ
omic and technological development), armies of experts, politicians,
planners, bureaucrats, socio-economists and even anthropologists
started acting as pauperologists, seeking to refine the discourse and
practices related to world poverty. The gist of the new approach was
expressed in President Harry Truman's famous Point Four Declara
tion: The economic life [of the poor] is primitive and stagnant....
Their poverty is a handicap and a threat both to them and to more
prosperous areas.' Greater production, development, assistance, and
a wider and more vigorous application of science and technological
knowledge are recognized as the answer and the 'key to prosperity
and peace'.
The new construct has indeed had a long gestation. The industrial
era accelerated the breakdown of vernacular societies. It led to 'the
great transformation' which dramatically reversed the traditional
relationship between society and economy and, for the first time in
history, disembedded the latter from its socio-cultural roots, thus sub
jecting society to its own economic rules and dynamics, rather than
the other way r^hd. 'Man, under the name of labour, nature under
the name of land, were made available for sale,' notes Polanyi.18 The
ensuing economization of society brought about, first, the hegemony
of national economies over vernacular activities, then, that of the
world economy over all others. These drastic changes affected
largely the ways in which the materialities underlying the various
perceptions of poverty came to be reinterpreted and reconstructed.
Firstly, the advent of a world economy, with all its realities and
accompanying myths (the existence of unlimited resources, techno
logical miracles, endless consumer goods, induced needs, etc.) cre
ated a set of universal referents. To go back to a case previously
mentioned, this is how the Ladakhis came to perceive themselves as
poor, once development and other national and strategic considera
tions had led to the economization of Ladakh. Similarly, not only
individuals and communities, but entire nations and continents
were led to believe that they were poor, and in need of assistance,
only because their per capita income was below a universally estab
lished minimum.
Secondly, while the traditional answers to poverty were, in the
past, often based on the pluralistic, culturally established and holis
tic perceptions of each particular space, the new programmes of
action represented a universalist, one-track, income-based, and to
tally cultural recipe for abstract 'patients'. The recipe was composed
of a mix of technicalities and 'neutral' economic referents which only
experts and planners could master and use with authority. The new
technologized approach to poverty developed its own cognitive
bases in such new fields of study and intervention as employment
policy, production strategy and the measurement of poverty, etc. It
certainly overshadowed the exploration of such deeper and more
sensitive issues as the processes of political and cultural domination,
the pervasive role of institutions, and the very nature of the indus
trial production system.
Thirdly, the new fetish of a healthy global economy destined to
save all the world's poor, not only helped the pauperizing economic
and political systems to reinforce and legitimize their positions, but
it also led their victims to perceive their own situation in the same
terms. Thus, the new proletarians and impoverished wage earners,
particularly in urban areas, focused their actions and struggles on
such limited objectives as employment, income raising and access to
public services. And, to this end, they sought to protect themselves
218 The Development Dictionary
through labour unions, sometimes totally disregarding the informal,
and formal, community organizations which had traditionally
helped the poor. Following the same patterns, even non-wage earn
ing workers in rural areas came to think that earning cash or receiv
ing economic assistance and public services were the most logical
ways of alleviating their deprivations.
Finally, as more people were manipulated into sharing the new
economic myth that poverty could now be finally conquered
through increased productivity and the modern economy's 'trickle
down' effects, the search for new modes of life and social organiza
tion based on simplicity, or on voluntary or moral forms of poverty,
were devalued and discredited.19
Most traditional societies had resisted the view that all poverty
reflected personal inadequacy. This view, that became characteristic
of every capitalist society, especially in its Protestant versions, was
now advanced as a major component of the new value system. Eco
nomic poverty was now to be perceived and acted upon, on a global
level, as a shame and a scourge. The vast increases in wealth offered,
or achieved, by modern societies fostering greed and profit-making,
played a significant role in the sharp devaluation of moral poverty.
Thus, the race enrichment became not only a desirable goal for the
economy but also a morally justified end.
The Construct in Action
Assumptions
To translate the construct into action, a particular discourse and set
of programmes were initiated. Looking back at what actually oc
curred during the nearly 50-year-old history of the exercise, it seems
to have rested on the following assumptions.
Firstly, the poor are assumed to be 'underdeveloped' and—mo
mentarily at least-—deprived of their capacity to define their own
interests. It is up to those in a superior position of knowledge and
power (governments, institutions, professionals, competent authori
ties) to assist them on their behalf. People's 'participation' is indeed
welcomed whenever that could help the populations concerned to
manifest their support for the professionally designed programmes.
Secondly, the discourse on global poverty recognized the fact that
the perceptions of poverty differed according to cultures. Yet it
Poverty 219
assumed that the perceptions in question all shared a common be
lief—that economic growth and prosperity was a sine qua non for
coming out of poverty. Thus it posited economic development as
the key to poverty eradication programmes, assuming further that
the resolution of all non-economic or cultural problems of the poor
could be tackled later.
The above assumptions served, in turn, to justify three basic ten
ets of interventionist | practices. Firstly, that poverty was too global
and sensitive a matter to be taken out of the hands of professionals
and institutions trained and empowered for this purpose. Secondly,
that the programmes in question had to be mapped, basically, in
terms of economic resources and needs. Finally, that the agents
mainly responsible for the design and execution of such strategies
would, naturally, be the governments and other institutions offi
cially in charge of both the identification of needs and the produc
tion of tire required solutions. Eradication of global poverty was thus
considered yet another reason for consolidating the present struc
tures of governance, both at the international and national levels.
Operations
Assessment of needs: Poverty alleviation programmes claim to be
based on an assessment of 'needs'. Yet, what planners, politicians
and economists tend to consider as their needs, has little or nothing
to do with what different categories of the poor perceive as their
needs.
In the global context, needs are first identified in an abstract man
ner, on a regional or national basis. To take an example, for UNDP,
a golden rule was set in the mid-'70s that 80 per cent of the organi
zation's resources should automatically be allotted to the needs of
LDCs (or Least Developed Countries), i.e. countries where the peo
ple's annual per capita income is lower than $300. The rule has now
been extended to some other countries which, at their explicit re
quest, are recognized, literally, 'as if they were LDCs' and, hence,
given the same 'privileges'! The fact which is totally disregarded by
the bureaucracies concerned is that, according to their own statistics
and criteria, a much larger number of persons considered to be poor
actually live elsewhere. The needs of these individuals are treated
differently only because they happen to be citizens of countries
where per capita GNP is higher.
As for the assessment of specific needs, these are evaluated on
220 The Development Dictionary
the basis of other sets of globally established economic criteria and
systems of comparison. For Unesco, for instance, to have a percent
age of illiterates above a certain figure, or a percentage of radios,
books or newspapers below another, represents a set of needs calling
for action. For WHO, the criteria of poverty are expressed in terms
of the ratio of doctors, nurses, and health centres to the population.
For FAO, the needs are evaluated in terms of per capita calorie or
protein intake. In all these cases, needs are perceived as figures or
combinations of elements disembedded from the particular mode of
livelihood characteristic of each culturally defined vernacular space.
The promotion of institutions and professional skills at the
country level: A major long-term component of all national and in
ternational programmes of poverty eradication has been what UN
jargon likes to call 'institution building', the latter being generally
coupled with the reinforcement of 'national capacities' and profes
sional skills.
As in the case of needs assessment practices, this policy also rep
resents a consensus reached amongst donors and recipients of eco
nomic and technical assistance. The policy is supposed to provide
the governments concerned with the instruments necessary for them
to design their plans of action and put an end to their structural
dependence on foreign expertise. Strong ministries of planning and
parastatal organizations were—at least until the 'roll-back' of the
state that took place during 'structural adjustment' in the 1980s—
presented as essential for assessing people's needs and responding
to them. For the donors, the policy served not only to provide them
with professionally respected counterparts, but also with institutions
assumed to be in a better position to guarantee the protection of
foreign economic and political investments, and in particular the
further integration of these economies into the global one.
Production of goods and services: The production of economic
goods and services is a major component of all poverty eradication
programmes—economic growth being the general talisman.
Sectoral reforms: The need for more diversified and expanded
services has led many of these programmes to reserve a leading
place to sectoral reforms, particularly in such areas as unemploy
ment, population control, co-operatives, and educational and health
services.
Redistributive policies: For more progressive or democratic
states, redistributive policies are considered to be the most effective
Poverty 221
and dignified means of stopping the structural processes of pauperi
zation generally triggered by the dynamics of economic develop
ment. In this context, Japan, India and China represent three very
different countries where interesting results have been achieved
through political and legislative measures.
Assistance programmes: These programmes are the last of the
activities which are generally pursued in the context of present day
poverty eradication campaigns. They are meant to come closer to
the actual and pressing preoccupations of the deprived. Whatever
their value in practice, welfare states consider assistance to the poor
as an obligation on society and an act of solidarity. More conserva
tive governments, together with economists, tend to question the
relevance of assistance to the long-term interests of a modern state.
Results
The actual impact of the above policies and programmes on the lives
of the deprived are often very different from the planners' expecta
tions. We shall try to explore them briefly, in the same order as
above.
The needs which development and poverty-eradication pro
grammes seek to identify and assess through their experts and plan
ning institutions are basically the needs of a certain 'economy', a
certain idea of poverty, and a particular category of consumers and
tax payers whose rights and interests should be protected. They do
not correspond to what the people at large need, confronted by the
fact of having been cut off from their vernacular spaces. While these
needs remain unmet, the very economic activities deployed in the
name of the poor impute to them different needs of a more insatiable
nature. On another plane, the problematization of the poor's needs
in modern economic terms further contributes to the disintegration
of vernacular spaces, thereby exposing the poor to situations of even
more complete helplessness.
To sum up, the whole exercise of needs assessment is justified on
the ground that it provides the planners with a 'scientific' basis for
their anti-poverty planning. In practice, it is often an irrelevant ex
ercise. The very idea that it should start with an allocation of funds
on the basis of the economic development of the particular country'
where the poor live, rather than the location and condition of the
poor themselves, is enough to indicate the bureaucratic and highly
irrelevant nature of the exercise. After separating the poor person's
222 The Development Dictionary
'needs' from him as an active and living human being, it reduces
him to only an inadequate ingredient of economic growth.
The absurdity of the situation is increased by the fact that the
whole task is entrusted to predator}' governments which happen to
be in power in the designated poorer countries. While the sover
eignty of these governments is often a matter of pure fiction, the fact
is that their power resides, on the one hand, in their capacity to
'milk' their own people and, on the other hand, in the assistance
they receive from their richer foreign patrons. For these govern
ments, poverty, like underdevelopment, is a catchword for legitimiz
ing their claims for more centralized forms of control over their
populations and, also, for more funds to implement their objectives
Foreign assistance, in particular, helps them to enrich themselves
and strengthen their army, police, security and intelligence services.
The latter operate to make the population pay for the services relat
ing to their own exploitation and accept their forcible integration
into the national and world economies, as well as the heavy burden
of debts contracted for those very purposes.
On a different plane, the objectives of institution building and
skill training create additional barriers between the vernacular
world of the poor and the new economized world of their protectors/predators. Much more than serving the poor, the new institu
tions and their professionals help the rich to better organize
themselves against their victims.
On the central issue of the production of economic goods and
services, it is still difficult for many to agree that poverty is not a
question of 'resources', in the sense given it by economists and plan
ners. Yet it is a fact that, in most developing countries, neither the
production of economic resources and commodities, nor the exten
sion of social services have ultimately served the poor. More often
than not, they have resulted in further diminishing their capacity to
meet their real needs which they used to do in the context of their
vernacular livelihood—which is a way of life under constant erosion
by the forces of the modem economy.
In fact, there is no evidence that affluence has, anywhere, im
proved the poor's condition. Notwithstanding the fact that the socalled affluent societies are presently the ones posing the greatest
threats to the very life of the planet, the reservoirs of plenty they
produce create, at the same time, new islands of poverty. The United
States, the richest country in the world, has to recognize that 30
Poverty 223
million of its citizens live below the poverty line.20 Similarly, in the
richest city in Brazil, a country of the South whose development was
once called miraculous, five out of its 15 million inhabitants 'live in
extreme poverty, earning less than 65 dollars a month'21
In short, what the poor need is not the production of economic
resources or services which ultimately benefit others or the genera
tions to come. It is rather the recovery of their actual capacity to tap
their own vernacular, locally available resources—which are totally
different from what economists call resources.
Sectoral reforms in the various fields of unemployment, popula
tion, education, health, etc., seem also to have had little or no posi
tive effect in reducing discriminatory trends. Here again, even when
these reforms have achieved their objectives, they have proved to be
of little relevance to the specific needs of the deprived. 'Good'
schools have generally served to produce greater numbers of drop
outs belonging to poor families. Contrary to their vocation, health
centres, and hospitals in particular, have seldom given hospitality
to the poor. Employment policies have hardly succeeded in stopping
the mass exodus of millions of people from their communities to the
slum areas of big cities.
In this long list of 'answers which are not', it could be argued
that redistributive policies at least have achieved partial success in
some important cases. The experiences of Japan, India and China
might suggest, each in a different way, that political measures aimed
at fostering the principles of justice and equity as integral dimen
sions of development policies, have reduced some of the impover
ishing side-effects of economy. The fact remains, however, that the
dynamics and goals of a 'resource' generating economy (principles
of profit, productivity, capital accumulation, etc.) diverge, by defini
tion, from socially defined objectives. As such, it is perhaps too early
to conclude that such redistributive policies will be able to keep pace
with the more powerful pauperizing trends of economy. In any case,
they may only succeed in replacing traditional poverty with the
forms of modernized poverty proper to all 'developed' countries.
Finally, there is no evidence to indicate that the successful economi
zation of life, in these countries, can ultimately prevent the destruc
tive side-effects of the process on people's livelihood, including the
destruction of their natural environment.
Assistance policies, finally, have failed in many ways. It is now
224 The Development Dictionary
„
clear that all systems of aid ultimately serve to perpetuate processes
of pauperization. As Georg Simmel has pointed out:
The goal of assistance is precisely to mitigate certain extreme
manifestations of social differentiation, so that the social structure
may continue to be based on this differentiation. If assistance were
to be based on the interests of the poor, there would, in principle,
be no limit whatsoever on the transmission of property in favour
of the poor, a transmission that would lead to the equality of all.22
A World Economy against Vernacular Villages
Using the striking image of 'one world' or the 'global village', the
development discourse invites its 'target populations' to look at their
predicament in a 'modern', 'realistic' and indeed comparative way.
It asks them to consider that the world has changed, and to learn
from the experience of those who have finally made it. If the poor
would only understand what historically brought the people of the
North to higher standards of living and greater political, economic
and technological power, they, too, would no longer hesitate to take
the main highway of development. This is presented as the only
transcultural and universal road for all would-be travellers to reach
their modem destination.
In reality, what is proposed serves only the interests of the high
way designers and their management system. For as one enters into
it, one becomes a prisoner of its rules and logic. Not only does one
have to use a car to drive on it, not only are the road, the destination,
and the exits predefined, but the person engaged on the highway is
no longer a free and incomparable human being. He becomes only
a passenger in a car with a more or less powerful engine whose
speed and performance henceforth define for him his comparative
position and power on the common road.
As to the notion of the global village, it uses a vernacular concept
only to destroy it. For it aims precisely at wiping out the thousands
of villages whose great diversity has actually made the world's sin
gularity and richness. The proposed 'one world' seeks to substitute
the thousands of real and living worlds with a single non-world, a
totally acultural and amoral economic corporation whose only pur
pose is to serve the interests of its shareholders.
Poverty 225
Certainly, the economic approach to life may well lead for a time to
a massive or more efficient production of goods and commodities, that
is, a development of things. Yet both the resources and the needs it
creates inevitably lead to a situation of permanent scarcity where not
only the poor and the destitute, but even the rich, have always less than
they desire. Moreover, regardless of the level of wealth reached by a
society, it is a fact that the poor are always the ones who suffer the
most from the gap generated between their needs and the economically
produced scarce resources. This is particularly so as the same economy
increasingly imputes to them new needs of its own, ever more difficult
to meet. Thus, it is becoming clearer to many that, however their needs
may be defined, it is not only an illusion, but a contradiction in terms,
to expect that economy could ever satisfy their needs.
Economy can indeed produce a lot of commodities and services
to relieve a particular set of needs. But as it disvalues and often
destroys a whole range of other human activities which, for the ma
jority of people, continue to be vital for meeting their needs, the
disabling effects of those relief operations are indeed highly negative
in the long run. The overwhelming majority in the world still shape
and satisfy their needs thanks to the network of human relationships
they preserve within their vernacular spaces, and thanks to the
many forms of solidarity, co-operation and reciprocity they develop
within their communities. Their activities are generally concrete re
sponses to concrete and immediate problems, enabling the people
involved to produce both the changes and the things they need. The
modern economy disvalues these activities and presses, or forces,
people to abandon them. It seeks to reduce everyone into becoming
the agent of an invisible national or world economy, geared only to
producing things for whoever can pay for them. In other words, in
the name of poverty alleviation, it only forces the poor to work for
others rather than for themselves.
In vernacular societies, abundance is perceived as a state of na
ture, inviting all living species to draw on it for meeting their spe
cific needs. These are, in turn, perceived as limited, insofar as they
represent a mix of organic and socio-cultural 'necessaries' for life.
To share such plentiful resources as air, water and land, arrange
ments are generally made, similar to the original commons in
Europe, which make it possible for everyone to have access to them.
The extent to which a community organizes itself for drawing on
226 The Development Dictionary
nature's abundant resources and sharing them with its members
defines the relative prosperity of that community.
Whenever the populations concerned are, for some natural or so
cio-political reason (drought, natural calamity, economic status, po
litical or cultural oppression, etc.), prevented from drawing freely
on these resources, they suffer from scarcity. Yet they continue to
refine and diversify their activities. Their success in dealing with
such situations is, however, more often than not, due to the non-eco
nomic aspects of these activities.
The modem economic construct of reality is based on a different,
if not opposite, set of assumptions. It assumes that natural resources
are scarce; that human needs, in particular those of homo economicus
are unlimited; and finally, that a sound economy can make it pos
sible for everyone ultimately to meet all their needs. This particular
perception of reality tends to reduce human beings and their socie
ties to their economic dimension alone. It strips the vernacular space
of all its powerfully alive potentialities. It seeks to transform it into
a mere economic machine, and one controlled and operated by oth
ers. In the same construct, human beings are perceived as simply
one of the many resources required by economy for its own needs.
The insidious effects of the destruction of vernacular space are
particularly dangerous at a time when many other alternatives need
to be explored, taking into account both the incredible advance of
certain autonomous and convivial technologies and the often very
imaginative solutions that some grassroots movements are offering
in terms of the regeneration of their people's life spaces.
Signals from the Grassroots
The way planners, development actomaniacs and politicians living
off global poverty alleviation campaigns are presenting their case,
gives the uninformed public a distorted impression of how the
world's impoverished are living their deprivations. Not only are
these people presented as incapable of doing anything intelligent by
themselves, but also as preventing the modern do-gooders from
helping them. Were these preposterous misrepresentations really
true, three-quarters of the world's population would already have
perished.
In the last couple of decades, promising signals are being received
Poverty 227
from the grassroots indicating their still amazing vitality—in many
areas, in fact, where the outsider would normally expect total resig
nation or submission. Not only in Asia where imaginative move
ments have been consistently witnessed since the Gandhian
revolution, or in Latin America where much has equally been hap
pening,23 but in Africa, too, interesting and original grassroots
movements are now emerging. These movements vary greatly in
their approaches to the regeneration of people's space and in their
size. As a rule, they are localized and rather small in number. Yet
the rapid growth of some, like the Chipko, or the Swadhyaya,24
which already embrace several million people, indicate that even
their size is growing in importance. Let me outline their significance
and message.
Indigenous responses: For a couple of decades, the development
discourse and its practices succeeded in manipulating and bullying
their 'target populations'. Many of the present grassroots move
ments represent people's rejection of this. The victims now want
their poverty or riches to be defined by themselves, and to deal with
that, free from unwanted pressures.
Growing resistance to governments and their modernizing poli
cies seems to have fostered the trend towards a return to roots. It is
true that such trends have often been co-opted by a new breed of
manipulators linked with fundamentalist or ethnic interests. Yet, as
a whole, most grassroots movements are now aware of the dangers
of sectarian ideologies. The lessons of the past, including the most
recent coming from Eastern Europe, prompt them, more than ever,
to rely on their own creative wisdom and cultures in responding to
their reality.
Surfing over the threats: Another expression of this growing dis
tance toward established ideologies is the rejection, by many a grass
roots movement, of the old-established notions of power, including
the much sought after objective of seizing power. Here, too, these
movements have not only learned much from their own experiences,
but from all the other revolutions. These have convinced them that
violence only leads to superficial changes, to a transformation of the
former victims into new victimizers, and often to new structural
forms of violence. As the pr ixis of grassroots movements leads them
to understand better the dynamics of violence and power, they seem
continuously to discover new and more artful ways of looking at
the world and themselves. As the common man realizes that the
230 The Development Dictionary
needs of persons if they are liberated from greed. The Economic
Age, like all its predecessors, is not an eternal state. The deep crises
it is traversing in all its fields of activity and, above all, the threats
it is now posing to the very existence of our planet, are already
preparing for the coming of a new age. The flourishing of other,
higher forms of convivial poverty may then appear as the last hope
for creating different societies based on the joys of zmore being',
rather than the obsession of 'more having'.
References
1. John lliffe, The African Poor: A History, Cambridge: Cambridge University
Press, 1987.
2. Encyclopaedia Judaica, under 'Poverty'.
3. Michel Mollat, The Poor in the Middle Ages, New Haven: Yale University
Press, 1978, p. 3. This study is a classic for the history of poverty in Europe.
Besides the word 'pauper', Mollat has listed the following words: referring to
impecuniosity and destitution in general (egens, egenus, indegens, inops, insufficiens,
mendicus, miser); shortage of food (esuriens,fanielicus) or clothing (nudus, pannosus);
physical defects such as blindness (caecus), lameness (claudus), arthritic deformity
(contractus), infirmity in general (infirmus), leprosy (leprosus), injury (vulneratus),
feebleness due to poor health or old age (aegrotans, debilis, senex, valetudinarius);
mental deficiency (idiotus, imbecillis, simplex); temporary weakness affecting
women during pregnancy and childbirth (mulier ante el postum partum); situations
of adversity such as those involving the loss of one's parents (orphanus), husband
(vidua), or liberty (captious), and, finally, banishment and exile (bannus, exiliatus).
4. Here are some samples of proverbs and sayings from Africa: For the Igbos,
'The rich man puts down his basket in the market, the poor man fears', 'The poor
man gets a friend; the rich man takes him away', 'Those who have money are
friends of each other.' For the Tswana, 'Where is no wealth, there is no poverty.'
In lliffe, op. cit., pp. 91, 78, 28, 85.
5. A letter from Hughes to Ellis, 13 March 1836, Council for World Mission;
Incoming Letters, South Africa 15/1E/34, quoted by lliffe, op. cit., p. 78.
6. Michel Mollat, Etudes sur I'Histoire de la pauvrete, publication de la Sorbonne,
Serie Etudes, Tome 8, Vol. 2, Paris: 1974, p. 15.
7. St Francis of Assisi considered that charity did not consist in 'leaning over'
the poor, but in 'elevating oneself' to their level.
8. For the Iranian mystic A. Nasafi, the only shortcoming of poverty is appar
ent, while its virtues are all hidden. In the case of wealth, it is exactly the opposite.
Hence, he exhorts upon the dervish: 'Poverty is a great blessing; wealth, a great
pain. But the ignorant ignores this, escaping poverty and sticking to wealth. Our
prophet... chose poverty, for he knew it and its effects, as he knew wealth and
its effects.' Translated from A. Nasafi, Le Livre de I'Homme parfait, Paris: Fayard,
1984, p. 268.
Poverty 231
9. The French Robert Dictionary defines the word as follows: 'Qui manque du
n£cessaire ou n'a que le strict n£cessaire' (Lacking what is necessary or having
only what is strictly necessary).
10. What is necessary to a peasant in a rural area is quite different from a city
dweller. And while a Ladakh family in the Himalayas can still live lavishly on
an average 'income' of much less than $1,000 a year, an American family of the
same size living in the US could hardly meet their needs with an yearly income
of $10,000, which represents the officially recognized 'poverty line'.
11. Michel Mollat, 1987, op. cit., p. 8.
12. The notion of 'entitlement relations' was coined by Amartya Sen, first in
1967, later elaborated in Poverty and Famines, Oxford: 1981.
13. For Adam Smith, the necessities were, interestingly enough, 'not only the
commodities which are indispensably necessary for the support of life, but what
ever the custom of the country renders it indecent for creditable people, even the
lowest order, to be without.' See An Inquiry Into the Nature and Causes of the Wealth
of Nations, 1776, p. 351.
14. Amartya Sen, op. cit., p. 1714.
15. 'Savanna Muslims viewed poverty with much ambivalence. Their tradi
tions stressed the values of wealth and generosity. At their best, traditions evoked
the largesse of the rich and the hospitality of common people which many Euro
pean travellers admired. At their worst, the same traditions bred contempt for
poverty, both in others, expressed sometimes in mockery of the handicapped, and
in oneself, for the shame of poverty could lead men (but apparently not women)
to suicide. John lliffe, op. cit.
16. Pauperism describes 'a category of people unable to maintain themselves
at all, or to maintain themselves at the level conventionally regarded as minimal,
without outside assistance...' 'Poverty', as a social phenomenon, implies only
economic and social inequality, 'that is, a relation of inferiority, dependence, or
exploitation. In other words, it implies the existence of a social stratum definable
by, among other things, lack of wealth.' See E.J. Hobsbawm, op. cit., pp. 398, 399.
17. Peter Bunyard, 'Can Self-sufficient Communities survive the onslaught of
Development?' The Ecologist, Vol. 14, 1984, p.3.
18. Traditionally, land and labor are not separated; labor forms part of life,
land part of nature, life and nature form an articulate whole. Land is thus tied
up with the organizations of kinship, neighbourhood, craft and creed—with tribe
and temple, village, guild and church.' Polanyi, op. cit., p. 178.
19. In this tradition, Michel Mollat quotes a great teacher of the first millen
nium, the sixth century North African abbot, Julianus Pomerius, who believed
that: 'once an individual ensured his own survival and the survival of his family,
he had the duty to give whatever he owned beyond his own needs to the debiles
and infitni, that is, to the poor.' See Mollat, op. cit., p. 23.
20. For Michael Harrington, already in 1963, the deprived in the US numbered
nearly 50 million people. Some startling facts on the phenomenon of poverty
amidst affluence in the US were recently reported in an article by Dolores King,
a correspondent of the Boston Globe. 'Twenty years after a White House Confer
ence was "to put an end to hunger in America itself for all time", as President
Nixon phrased it, hunger is making a comeback in vengeance.' See 'Hunger's
2
National Development, Poverty
and the Environment
I: Development, Poverty, Environment
n 1947, after years of bitter struggle, India finally became
I
independent. In a voice charged with emotion, Jawaharlal
Nehru proudly proclaimed to the nation that India had kept
her ‘tryst with destiny’. For the leaders of the nationalist move
ment as well as for the general populace, it must have been an
exhilarating moment to stand on the threshold of a newly inde
pendent country and imagine all the possibilities for progress that
lay ahead.
Now, forty-five years later, what have we achieved as a nation?
0
3
a>
20
IN THE BELLY OF THE RIVER
This chapter will discuss the choices made b^he independent
Indian state to develop the nation and improve the lives of its
citizens. In the first part, I will examine the impact of development
policies on the lives of the poor and on the environment, and the
conflicts that have arisen as a consequence. In the second I analyse
these conflicts using the theoretical approach of Ecological Mar
xism. This approach focuses on conflict over resources and gives
primacy to popular grassroots struggles, the collective resistance
of tribal communities, fisherfolk, labourers and peasants to proces
ses which impoverish them and destroy their natural environment.
I end by looking at the ways in which the lives of tribal people
have been depicted in these theories as exemplars of an alternative
paradigm of development based on harmony between nature and
culture.
From its inception, the Indian state was confronted by two
different visions of reconstruction: the Gandhian project of reviv
ing the village economy as the basis of development, and the
Nehruvian plan for prosperity through rapid industrialization. On
5 October 1945, Gandhi wrote a letter to Nehru in which he
outlined his dream of free India:
I believe that, if India is to attain true freedom, and through India the
world as well, then sooner or later we will have to live in villages — in
huts, not in palaces. A few billion people can never live happily and
peaceably in cities and palaces ... My villages exist today in my imagina
tion . . . The villager in this imagined village will nor be apathetic . . .
He will not lead his life like an animal in a squalid dark room. Men
and women will live freely and be prepared to face the whole world.
The village will not know cholera, plague or smallpox. No one will live
indolently, nor luxuriously. After all this, I can think of many things
which will have to be produced on a large scale. Maybe there will be
railways, so also post and telegraph. What it will have and what it will
not, I do not know. Nor do I care. If I can maintain the essence, the
rest will mean free facility to come and settle. And if I leave the essence,
I leave everything (Chandra 1987).
'God forbid that India should ever take to industrialism in the
manner of the West’, Gandhi observed. ‘The economic im
perialism of a single tiny island kingdom (England) is today
keeping the world in chains. If an entire nation of 300 million
took to similar economic exploitation, it would strip the world
bare like locusts’ (Gandhi 1951: 31). The appeal of the Mahatma
NATION^)EVELOPMENT, POVERTY AND THE ENVIRONMENT
21
lay in his programme of revitalizing village communities and craft
production by employing simple technologies to provide jobs and
a decent livelihood to a predominantly rural population. The
liberation that Gandhi promised was not merely an economic
independence; it was, most profoundly, an assurance that the
cultural traditions ofthe Indian peasantry would reign ascendant.1
Gadgil and Guha remark on the apparent paradox that the
‘Gandhian era of Indian politics saw the juxtaposition of a peasant
based politics with the increasing influence of Indian capitalists
over the Congress organization’ (Gadgil and Guha 1992: 182).
Despite the theoretical primacy of the peasant, it was the Indian
industrial class that was able to use nationalism to wrest conces
sions from the British. The protective measures reluctantly im
posed by the British on the post-World War I economy enabled
Indian manufacturers to amass respectable fortunes and strength
en their political hold. The expansion of the Congress was finan
cially assisted by Indian capitalists whose initial distrust of the
party dissolved when they realized that Gandhi’s politics consisted
of an all-embracing effort to mobilize all sections of society in a
common struggle. Gandhi’s theory of the capitalist and the
landlord as ‘trustees’ of national property was ambiguous enough
to accommodate potentially divergent interests.
Despite the deification of Mahatma Gandhi in the pantheon
of nationalism, his vision was eclipsed within the Congress party
by the ideas of Nehru, Sardar Patel and others. Gandhi’s vision
struck no chords in the mind of Jawaharlal Nehru, who replied
rather brusquely to Gandhi’s letter of October 1945: ‘It is many
years since I read Hind Swaraj and I have only a vague picture in
my mind. But even when I read it twenty or more years ago it
seemed to me completely unreal . . . A village, normally speaking,
is backward intellectually and culturally and no progress can be
made from a backward environment’ (Chandra 1987). Most In
dian nationalists believed that India’s reconstruction could only
come about through an emulation of the West, ‘intellectually
through the infusion of modern science, and materially through
1 Gandhi’s ‘message’ was variously interpreted and acted upon, sometimes
in ways unanticipated and unapproved of by the Congress. Amin (1988)
discusses diverse religious and militantly political responses to Gandhi by the
peasants of Gorakhpur.
Hila
22
IN THE BELLY OF THE RIVER
the adoption of large-scale industrialization’ (Gadgil and Guha
1992: 183). Through intensive industrialization and urbanization,
fostered by a strong nation state, India could overcome the handi
cap of its colonial past to catch up with the West. The rapid strides
taken by Germany under Bismarck, by Meiji Japan, and Stalinist
Russia proved that this economic miracle was possible. Not sur
prisingly, this programme was enthusiastically supported by In
dian capitalists, who foresaw that the Indian state’s investment in
essential infrastructure would encourage the flowering of private
industry.
Gadgil and Guha describe the choices that were made at this
crucial juncture by the Congress leadership. Its most important
decision was the adoption of the ‘industrialize or perish’ model
of economic development in the Second Five Year Plan. From
the Second Plan onwards, the Indian government spent only 22
per cent of its total Plan budget on agriculture, even though 75
per cent of the population was engaged in agriculture. The greater
share of Plan outlay consistently went to develop industries, which
employed merely 11 per cent of the population (Kohli 1987: 73).
This strategy indiscriminately applied ‘modern’ technologies, with
little regard for their social or ecological consequences.
In theory there were, of course, many options available to the Indian
state. The technologies adopted could be capital or labour intensive;
they could be oriented towards satisfying the demand for luxury goods
or fulfilling the basic needs of the masses; they could degrade the
environment or be non-polluting; they could use energy intensively or
sparingly; and they could use the country’s endowment of natural
resources in a sustainable fashion or liquidate them; and so on (Gadgil
and Guha 1992: 184).
However, these choices were critically affected by three power
ful interest groups: capitalist merchants and industrialists, the
technical and administrative bureaucracy, and rich farmers. The
shape of the Indian economy today is a direct consequence of the
political choices made forty years ago.
Achievements after Independence
Forty-five years after independence, India is transformed in numerGreat Bensa| Famine
»
NATIONAL DEVELOPMENT. POVERTY AND THE ENVIRONMENT
23
of 1942 is now a distant memory. This is partly due to a tremen
dous increase in foodgrain production since the 1960s. India’s de
pendency on food imports has shrunk to such an extent that today
it imports less than two per cent of the food that it eats (UNDP
1993: 161). Virtual self-sufficiency in food production is matched
by a diversified industrial base. Over the last ten years, our Gross
National Product has been growing annually at the respectable rate
of 5.4 per cent. The improvement in the quality of most lives is
also reflected in health statistics: an average Indian, who in 1960
would have died at the age of forty-four, can today expect to live
for almost sixty years (UNDP 1993: 143). In many urban centres,
amenities like electricity, piped drinking water, public education,
health care and transport can be taken for granted.
For some Indians, the post-independence years have also
brought vast opportunities for enhanced consumption beyond the
basics. The middle classes and above can afford or aspire to possess
many more motorized vehicles, television sets, coolers, refri
gerators and other durable goods. Glittering enclaves in cities like
Delhi or Bombay boast shops and lifestyles that rival New York
or Tokyo. Affluence unimagined in colonial times, except by a
handful of princely rulers, is the happy lot of India’s elite.
All this can be attributed to the early emphasis on industrial
growth, both in manufacturing and in agriculture.2 It was general
ly assumed that the benefits of industrial expansion, increased
production, employment and income, would ‘trickle down’
through the economy to those at the very bottom. At the same
time, there was some attempt to temper the differences in a grossly
unequal society by undertaking a modicum of income redistribu
tion. This was done through half-hearted land reforms, with the
Congress walking the tightrope between populist appeal and the
support of the landed classes. The zamindars, loyal to the former
colonial powers and therefore expendable, were deprived of land
above a prescribed ceiling, but the holdings of middle and rich
peasants were left intact. The status of most of the landless poor
remained unchanged.3
- The development of agriculture in I ndia has been marked by the increasing
use of industrially produced inputs such as fertilizers, pesticides and heavy
machinery. The transformation of agricultural processes due to rhe application
of capital-intensive technology maybe called the industrialization of agriculture.
3 For a detailed evaluation of land reforms in three Indian states and their
- -...............-e- • • • • • • « r v<«Tnrnrni O
,N THE BELLY oF phe river^J
For the most part it was believed that industrialization and
urbanization were essential strategies for national development;
their benign character was not questioned even though these
processes were marred by undesirable 'side-effects’ such as increasing levels of urban congestion, and air, water and noise pollution.
Pollution was not perceived as a priority in the early decades of
industrialization. While planners shrugged their shoulders and
said ‘one cannot make an omelette without breaking eggs’, eco
nomists simply called these problems ‘externalities’ and banished
them outside the realm pf the rational.
Nevertheless, environmental pollution, lamented from the very
first days of black-belching smokestacks in the Industrial Revolu
tion, has become an issue on the international agenda, a subject
of treaties and negotiations. Global warming threatens to bring
about wildly fluctuating climatic conditions and the gradual sub
mersion of Bangladesh into the sea. Ozone depletion has already
sharply increased rates of skin cancer and cataracts, especially in
the southern hemisphere (Gore 1992: 85). These problems,
together with the clouds of acid rain that drift in defiance of
international borders, have driven home to the West that environ
mental concerns need to be universalized. The futures of North
and South are inextricably linked.
Developing countries such as India have viewed the industrial
ized North’s environmentalism with suspicion.*
4 Prescriptions for
controlling air pollution entail curbs on the use ofchlorofluorocar
bons (CFCs), a class of chemicals used in refrigeration, and reduc
tions in the emission of acid rain-causing sulphur and nitrogen
oxides by installing costly scrubbers and precipitators. Defenders
of Indian industry claim that these measures are uneconomical;
they have chosen to see the issue as a trade-off between imperative
growth and expensive pollution control. Indian delegates at the
1992 Earth Summit in Rio de Janeiro reacted as if a concern about
pollution was a neo-imperialist plot, designed to keep the South
ever backward. In this view, since pollution is a necessary con
comitant of industrial growth, the North’s attempts to reduce
impact on poverty, see Kohli (1987).
4 India has been justly indignant about rhe double standards employed by
the West. The industrialized nations have chosen to preach to the South about
reducing methane emissions caused by paddy cultivation and bovine digestion,
while ignoring their greater culpability in the production of carbon dioxide.
national development, poverty and the environment
25
emissions globally would deny the South the fruits of develop
ment. Environmentalism is perceived as a luxury that the South,
with its pressing problems of hunger and deprivation, cannot
afford. This attitude stretches back in time to the 1972 Stockholm
Conference on Environment when the Indian prime minister,
Indira Gandhi, proclaimed that ‘poverty is the worst polluter’.
The Persistence of Poverty
The optimistic assumption that increased welfare due to industrial
growth would automatically percolate to the poor has not been
borne out by experience. Both poverty and. pollution continue to
mar the Indian landscape. For the 423 million people below the
poverty line, almost halfthe nation, development has been a distant
phenomenon, watched from the wayside (UNDP 1993: 141).
Even after forty-five years of independence, most of these people
are trapped in a'web of poverty and powerlessness, their faculties
and talents buried under the crushing weight of everyday life. The
profile of this deprivation has a numbing quality because of the
sheer vastness of the problem: every year 3.84 million children die
before they reach five years of age, killed by hunger and disease,
another 73.1 million children under five are malnourished; 72.9
million children are not enrolled in schools; an even larger number
do not go to school; 281 million adults, 61 per cent of them
women, cannot read or write (UNDP 1992: 141). And India’s
boast of being self-sufficient in food is a cruel hoax for the
hundreds of millions who habitually go hungry. While isolated
reports of starvation deaths, those in Kalahandi and Palamau for
instance, jolt the news-reading classes out of their complacency,
the pervasiveness of poverty goes unnoticed most of the time.
Another hope belied is the expectation that economic growth
would create jobs and income for the masses. While the South
Asian economy has almost doubled in size between 1975 and
1990, employment has increased only by 37 per cent. This
phenomenon has been called ‘jobless growth’ by the United Na
tions Development Programme (UNDP), which attributes it to
the application of inappropriate capital-intensive technology. The
UNDP Human Development Report 1993 remarks that ‘the pre
valent technology reflects the existing pattern of income distribu
tion — 20 per cent of the world’s population has 83 per cent of
26
27
IN THE BELLY OF THE RIVER
NATIONAL DEVELOPMENT. POVERTY AND THE ENVIRONMENT
the world’s income and, hence, five times the purchasing power
of the poorer 80 per cent of humankind. Clearly, technology will
cater to the preferences of the richer members of the international
society’ (UNDP 1993: 37).
It is frequently argued that the benefits of economic growth
have been neutralized by the high rates of growth of the Indian
population. According to this view, poverty exists because of the
pressure of ever-increasing numbers on a finite resource base.
While population growth rates are a source of concern, they do
not constitute a problem by themselves. Statistics of present food
production and projections for the future show that India is more
than capable of feeding its citizens adequately (UNDP 1993:
161). Yet the fact that this food does not reach the hungry points
to another problem — social inequality. It is not so much
population pressure that causes hunger but the distribution of
food and the social and material resources needed to obtain it
(Webster 1984: 102).5
The exacerbation of social inequality has been intrinsic to the
process of development as experienced so far. Through centralized
planning and execution, the Indian state retains control of the
‘commanding heights’ of the economy. Its projects and policies
are largely devised by bureaucrats and engineers, usually in col
laboration with big business and large farmers’ lobbies, and with
very lirrle popular participation. The ‘industrialize or perish’
model has been combined with a tendency to be grandiose and
build on a gigantic scale. The concentration of public resources
in particular sectors, such as heavy industrial infrastructure and
irrigated agriculture, has created projects such as the superthermal
power complex in Singrauli and the Narmada Valley Project,
which have a gargantuan appetite for public funds. One dam of
the Narmada Project, Sardar Sarovar, will alone cost more than
the entire amount spent on irrigation by the government since
Independence! Despite evidence to the contrary, the state still
prefers to believe that showy, expensive projects are better invest
ment than more modest, decentralized ones. For instance, in a
distribution of resources that defies all logic, during 1951-85 the
Indian government invested the greater part (64 per cent) of its
total irrigation outlay of 23,180 crores on major and medium ir
rigation projects which have irrigated land at the cost of Rs 19,310
per hectare, even though minor irrigation projects provide water
at a much more economical rate of Rs 4520 per hectare. Despite
the greater outlay of 64 per cent, major and medium irrigation
projects have irrigated only 30.5 million hectares of land, while
minor projects have irrigated 37.4 million hectares! (Sachidanandan
5 There is also an impressive body of evidence that shows that high rates of
growth of population are a consequence of human deprivation, and chat poverty
alleviation directly affects population growth. In a study of West Bengal and
Kerala, Moni Nag (1984) demonstrates that Kerala’s success in population
control is due to the state’s investment in improving education and health care,
especially for women. Kerala also ensures that food will be available and affor
dable to all its citizens through a public distribution system that covers 97 per
cent of its population. While Kerala is much less industrialized than West
Bengal, its people marry later and have fewer children.
1988: 80).
The skewed priorities of the government are also reflected in
the pattern of investment in energy production. Only three per
cent of India’s energy needs are met by electricity, while biomass
provides more than 50 per cent. Yet, in the Seventh Plan (1985-
uorlui'McNl, I-OVER1Y AND THE ENVIRONMENT 29
1990), Rs 32,000 crores were allocated for thSBectricity sector,
whereas the development of biomass resources received less than
Rs 2000 crores (Dharmadhikary 1991: 15). Most of this power
is supplied at highly subsidized rates to urban consumers and
industries, and for agricultural pumping. Of course, the poor who
depend primarily on biomass for their energy needs, receive no
subsidy at all.
Poverty and the Ecological Crisis
This pattern of development has fundamentally altered two crucial
bases of production: land and water. Let us examine the condition
of land.6 In 1990, India had a land area of 328.7 million hectares
(ha), 55-6 per cent of which was considered arable. 45.68 million
ha or 25 per cent of arable land is irrigated. 22.4 per cent of India’s
land mass is designated as ‘forest’. According to a pioneering study
by B.B. Vohra, who was the first to estimate the extent of degrada
tion of India’s land, only 42 per cent of the area designated as
‘forest’ is actually under adequate tree or grass cover; the rest is
more or less completely devoid of vegetation (Vohra 1980: 3).
With satellite imaging, the government has been compelled to be
more accurate in its estimates of deforestation. According to the
National Remote Sensing Agency, forests covered 55.5 million ha
(16.89 per cent of total land area) in 1972-5. During 1980-2,
this area dropped to 46 million ha (14.1 per cent of total area).
In the 1990s forests cover a scant 32.8 million ha or 10 per cent
of the total land area. Whereas four million hectares of forest area
was‘lost’ between 1951-76, over the last fifteen years 22.7 million
hectares of forest have been cut down (Gadgil and Guha 1992:
196; UNDP 1992: 173).
On the basis of information supplied by the ministry of agricul
ture, Vohra estimated that more than three-fourths of our agricul
tural land is degraded due to serious soil erosion, waterlogging
and salinization (Vohra 1980: 4). Other sources estimate that 20
million ha or almost 11 per cent of our agricultural land is severely
affected by salinization; another 7 million ha have had to be
6 The State ofIndia s Environment 1984—85: The Second Citizens 'Report con
tains an excellent account of the status of India's water resources (CSE 1985:
27-48).
abandon^^due to salt accumulation (Gore 1992: 111). The
productivity of land is diminishing and its use in the future is
uncertain. According to one estimate, India loses 6 billion tons of
topsoil every year (Gore 1992: 120). While soil erosion is a result
of deforestation, excessive grazing, and cultivation of hill slopes
without terrasing or bunding, waterlogging is usually caused by
canal irrigation in poorly-drained soils. It takes nine hundred years
to form one inch of topsoil; it may take only one monsoon or one
badly-designed canal system to lay it waste forever.
Deforestation, together with the emphasis on building embank
ments and dams, has led to a steady increase in the incidence of
floods in the fertile plains of north India. Annual flood damages
increased nearly forty times from an average of Rs 60 crores per
year in the 1950s to an incredible Rs 2307 crores a year during
the 1980s. The area affected by floods shot up from an average
6.4 million ha a year in the fifties to 9 million ha a year in the
eighties (CSE 1991: viii). Ironically, embankments and dams were
constructed in order to control the damage caused by floods.
Instead, they have prevented the nutrient-rich silt carried by rivers
from being deposited in the soil, thereby depriving flood plains
of a valuable source of fertilizer. The sediment now accumulates
on the river bed, raising it so that the river in spate overflows its
sides and devastates more land, lives and property.
None of these losses figure in our national income accounts.
When we compute our Gross National Product or our rate of
industrial growth, costs such as the loss of topsoil and wasted land
are not included in the calculus of economic decision-making.
Even though environmental ‘depreciation’ fundamentally affects
the stream of value derived from nature in the future, even though
the immediate effects of ecological destruction are real and crip
pling, these costs tend to remain invisible. In fact, paradoxically,
environmental destruction appears on the credit side of the na
tional ledger if it provides a one-time increase in production, even
though that increase may destroy all possible future benefits, and
may have disastrous ‘side effects’ in the present. For instance,
deforestation will increase GNP through the sale of timber, but
there is no enumeration of the losses incurred by cutting trees —
the adverse ecological effects or the loss of other use values derived
from a forest.
The affluent (usually urban) elite are mostly unmoved by the
30
31
IN THE BELLY OF THE RIVER
NATIONAL DEVELOPMENT, POVERTY AND THE ENVIRONMENT
irreparable loss of national resources. With their power to buy
their way out of any crisis by cornering resources for themselves,
they have been able to insulate themselves from ecological shock
and have even enhanced their lifestyle. This class, which has
precipitated land degradation by its extraordinary powers of
ownership, control and consumption, even today tends to dismiss
the environmental crunch as the gloomy prognosis of pessimists.
But the ecological crisis is not some distant doomsday scenario,
it is here today in the lives of the poor, experienced as worsening
conditions of subsistence. The increasing difficulties that poor
rural women and children face in gleaning fuelwood, finding
fodder, and fetching water have been extensively documented
(CSE 1985: 172—88). Less studied is the steady migration of
dispossessed rural people, compelled by ecological degradation to
leave the land. According to the UNDP, around 750 million of
the world’s poorest people live in rural areas. Of these, around 20
to 30 million move each year to towns and cities. And an increas
ing proportion of these migrants are ‘environmental refugees’
whose land is so eroded or exhausted that it can no longer support
them (UNDP 1992: 58). As ecological destruction dispropor
tionately affects the poor, the State of India’s Environment Report
began by clarifying the politics of the crisis by declaring that
‘environmental degradation and social injustice are two sides of
the same coin’ (CSE 1982).
Large landowners, for their part, ensured that they had an adequate and
cheap supply of water, power and fertilizer for commercial agriculture.
Finally, the bureaucrat-politician nexus constructed an elaborate web of
Ecological Crisis and the Model of Development
Why has the industrialization and urbanization model failed to
improve the lives of the poor? Why has it systematically im
poverished the natural resource base upon which they depend?
These issues can be understood by examining the pattern of state
intervention in the allocation of resources. As discussed above, the
independent state has been primarily moved by the desire to
safeguard and further its own interests and those of its allies:
capitalists, merchants and industrialists, and rich farmers:
rules and regulation in order to maintain control over resource extraction
and utilization. In this manner, the coalescence of economic interests
and the seductive ideology of modernization worked to consolidate
dominant social classes. This strategy willingly or unwillingly sacrificed
the interests of rhe bulk of the rural population — landless labour, small
and marginal farmers, artisans, nomads and various aboriginal com
munities — whose dependence on nature was a far more direct one
(Gadgil and Guha 1992: 185).
The orientation of the government to look after its own is
clearly visible in its policies. Gadgil and Guha (1992), in their
excellent analysis of forest policies, show how forests are being
mismanaged in order to maximize immediate profits for the state
and industry, with complete disregard for the future. The tradi
tional rights of rural communities who use the forests primarily
for subsistence have been severely curtailed and reduced to grudg
ingly granted concessions. The inequalities in access to resources
are exacerbated by strategies such as rhe differential pricing of
forest produce: in Karnataka, while bamboo was supplied to paper
mills at the cost of Rs 15a tonne, it was sold to basket weavers
and other small bamboo users in the market at Rs 1200 per tonne
(CSE 1985: 368).
The tendency of the government to consolidate its power over
resources is also shown in its support for large, centralized irriga
tion and energy projects. These have encouraged the profligate
use of natural resources — for instance, in irrigated agriculture
where farmers shift to remunerative, water-intensive crops such as
sugarcane, uncaring of the ecological qr social consequences.
Canal irrigation is a highly subsidized system for providing water;
while the costs are borne by the state, the benefits mainly go to
landowners, further increasing social inequalities.7 The provision
of abundant water for the few through costly irrigation schemes
results in induced scarcity for the many. In Maharashtra, people
living in the catchment area of a large dam are prohibited by law
The influence of the capitalists was reflected in the massive state invest
ments in industrial infrastructure — e.g. power, minerals and metals,
and communications, all provided at highly subsidized rates — and in
rhe virtually free access to crucial raw materials such as forests and water.
' The concept of equitable distribution of water rights among the landed as
well as the landless is still not widely accepted in India, even though it has been
applied successfully in places like Ralegan Sidhi, Maharashtra (Pangare and
Pangarc 1992) and Sukhomajri, Haryana (Chambers et aL 1989: 155-6).
rr%r r tttttt 1 l i iTO
NATIONAL DEVELOPMENT. POVERTY AND THE ENVIRONMENT
from using more than 15 per cent of the total available water
(Sharma 1990: 230-1). Not only is water directly diverted to the
powerful, the opportunity cost of this investment is embodied in
the number of small, decentralized schemes to provide protective
irrigation to dryland farmers which never materialize because of
lack of funds (Sengupta 1993). Considering that 75 per cent of
India’s arable land depends only on rainwater, the emphasis on
irrigated agriculture has concentrated funds on a privileged
minority.
Ironically, the bulk of development policies, justified in the
‘national interest’, actually diminish poor people’s ability to con
trol and gainfully use natural resources. Every ‘national’ project is
presented as beneficial for the masses even though it requires some
poor people to surrender their land or their livelihood. While the
‘greater good of the nation’ appears to be a laudable cause, it must
appear suspicious to the rural poor who are consistently chosen,
time and time again, to make all the sacrifices, while those more
powerful reap the benefits. Suresh Sharma describes that when
Prime Minister Jawaharlal Nehru reassured those displaced by
Rihand dam in Singrauli in 1961:
People felt that their suffering would not be in vain. Their instinctive
sense of nobility was stirred when Nehru spoke of the Nation and
Development. They believed in his promise of a future of plenty to be
shared by all. And they half accepted the trauma of displacement believ
ing in the promise of irrigated fields and plentiful harvests. So often
have the survivors of Rihand told us that they accepted their sufferings
as sacrifice for the sake of the nation. But now, after thirty bitter years
of being adrift, their livelihood even more precarious, they ask: “Are we
the-only ones chosen to make sacrifices for the nation?” (S. Sharma
1992: 78).
In the event, it is obvious that the ‘national interest’ is merely
the interest of the state, industry and rich peasantry.
The model of development established since independence has
fundamentally altered the way in which different social groups
use and have access to natural resources. The changes wrought
by the independent state have created conflicts over competing
claims to the environment. These conflicts range from the inces
sant battle between the forest department and local communities,
to the war raging between mechanized trawlers and traditional
33
fishing boats in India’s coastal waters, to the controversy over
the Dunkel Draft and rights to genetic resources. These claims
arc not merely for a greater share of the goods, but involve
different ways of valuing and using nature — for profit or
survival, or some combination of the two. They also involve
different worldviews — one driven by the desire to dominate
and exploit nature and humanity, the other moved by empathy
and respect, sometimes reverence, for the two.
An attempt to understand these relationships between environ
ment and development led to the creation of an Ecological
Marxist ideology which marries a concern for conserving natural
resources with the issue of social justice. As the State of India’s
Environment Report 1982 argues, the future of the natural world
is best assured in the hands of the poor and the exploited. Not
only will such a transfer of power result in a more just world, it
will lead to a husbanding of resources and their utilization for
the common good. Efforts to bring about socially just and
ecologically sound 'sustainable development’ must be seen both
as a response to, and a departure from, the shortcomings and
contradictions in the present model of development.
34
IN THE BELLY OF THE RIVER
national development, poverty and the environment
35
The Model of ‘Development’
The attempt to achieve modern industrial growth has been based
on two interrelated processes: one, the unchecked use of the earth’s
natural resources; and two, the transformation of people, often
against their will, into a dispossessed working class. These proces
ses were not new; they had their antecedents in India’s history of
colonial and precolonial extraction, and they continued after In
dependence, though they were legitimized in different ways.
During the colonial period, modernization was part of the im
perial mission of civilization and improvement of the natives -—■
the white man’s burden (R. Guha 1988). For the independent
state, modernization was essential to the project of national
development. As we saw in the first part of this chapter, the
ideology of 'national development’ has been used to legitimize
II. Development, Environment and Tribal Resistance
NEW DELHI. 28 Jan. 1992. The Chief Minister of Gujarat, Mr
Chimanbhai Patel, asserted that work on the Sardar Sarovar Project was
proceeding apace. Mr Patel was in Delhi to receive the Independent
Review team sent by the World Bank to evaluate the environmental and
rehabilitation aspects of the Project. In a meeting with the press, Mr
Patel said that any objective appraisal of the Project would show that it
was scientifically planned to harness the river Narmada to permanently
solve the water problems of Gujarat. The government of Gujarat had
designed a truly enlightened rehabilitation package for dam-oustees.
Opposition to the Project was limited to some misguided environmen
talists. (Press Release: Government of Gujarat.)
I was in Anjanvara, a village of Bhilala tribals in the area to be submerged
by the Sardar Sarovar dam. It was late in the evening and I was sitting
outside the hut of the pujara (priest), watching him roll a bidi. We were
talking about gods. The pujara said, ‘People think of Narmada as bigger
than all the gods, bigger than the earth. She can grant all that anyone
desires.' 'Then why aren’t you better off? Why doesn’t she give you all
that you want?’ I asked. ’But we live in the belly of the river,’ said the
pujara. ‘Sometimes she listens to us and sometimes she doesn’t.’
exploitation.
The project of national ‘development’8 is not limited to the
Indian state alone, but is embedded in contemporary global struc
tures such as the arrangement of the world into nation states, and
the expanding system of international capitalism. While con
centrating on the relations between the Indian state and its sub
jects, we must remember that these relations and those of
international political economy mutually shape each other. The
model of development as modern industrial growth was derived
from the historical trajectory of former colonial powers such as
Britain, France and Germany — a model that newly independent
states sought to emulate. The pursuit of growth necessitated large
injections of capital into the national economy for developing
industrial infrastructure — an investment that has often been
financed by foreign funds. A typical instance of such state expen
diture aimed at fostering economic growth is the Narmada Valley
Project in western India. This is a gigantic scheme to harness the
waters of the river Narmada for irrigation, power generation, and
drinking. The Project has been partially funded by the World
Bank, and partially by bilateral aid.
s I have placed development within quotation marks to signify that the
positive connotation of rhe term is an ideological construct and should not be
accepted uncritically. However, this is a clumsy device, so I shall not use it
through the rest of the text, merely adjuring the reader to keep in mind that
rhe quotes, though invisible, arc present.
yu
IN THE BELLY OF THE R^p
Ironically, such external borrowing for capital-intensive pro
jects has served to increase indebtedness to the point that it has
undermined the very objective of national development. The easy
availability of credit for development in the 1960s and 1970s has,
in the last decade, become a millstone around the neck of develop
ing nations. Foreign creditors rescheduled debt repayment for
borrower nations on the condition that they would undertake
‘structural adjustment’ — trade liberalization and reduced spend
ing on public welfare. The austerity measures thus entailed have
left the poor tightening their belts over their hungry bellies
(George 1988). Being in the red has further shifted the orientation
of national governments from meeting domestic needs to a preoc
cupation with debt servicing. In order to give creditors a guarantee
of its ability to maintain the schedule of repayment (a condition
for new loans), the state has to play an increasingly repressive role,
keeping the working classes in line and preventing social unrest
(Canak 1989). Thus, the state’s indebtedness to foreign capital,
incurred in order to develop, has today become a constraint,
reducing the options available for autonomous growth.
In the name of development, national elites, through the in
stitutions of the state and the market, and often in collaboration
with foreign capital, have appropriated natural resources — land,
minerals, forests and water — for conversion into commodities.
The circulation of goods which this has brought forth has taken
place primarily among the already affluent owners of capital and
other elites. Elites, who have the desire and the power to profit
and consume, have thereby impoverished the earth of its natural
wealth and, through degradation and pollution, have rendered it
unlivable for future generations. This has been called the second
contradiction of capitalism — a contradiction between the ever
expanding circulation of capital which has no limits and a Nature
which has many (O’Connor 1988).
The earth’s impoverishment has meant that communities who
depend on the natural base for sustenance have been deprived of
their resources. This alienation cannot be adequately described in
terms of the loss of a material livelihood alone; it is most profound
ly a wider loss of cultural autonomy, knowledge and power. In
the name of development, people have been pushed off the land;
their forests and water have been taken over by the state and the
market, so that they have been deprived of everything except their
NAT^^\L DEVELOPMENT. POVERTY AND THE ENVIRONMENT
37
labour power. Just as nature has increasingly become a com
modity, so has human'labour. This is the first contradiction of .
capitalism — that labour works with nature to produce value,
only to have it appropriated by the owners of capital. This unequal
relationship has been enforced by the authority of the state, based
ultimately on its monopoly over violence (Tilly 1985)- The coer
cive aspect of state power has been concealed behind the institu
tions of liberal democracy. Thus, in another ironic twist, human
impoverishment has occurred even as people have participated in
the political processes of democratic decision-making, apparently
consenting to their own ecological, economic and political mar
ginalization.
Ecological Marxism
Such a theoretical understanding of development, as a process that
exploits the labouring classes as well as nature, has come about
fairly recently. Traditionally, Marxist analyses of social conflict
have paid much more attention to the conflict between labour
and capital, or the social relations of production, than to the
exploitation of nature. The incorporation of the capital/nature
contradiction into Marxism is the contribution of Ecological
Marxists such as James O’Connor, Watts, and others, who have
tried to bring ecological concerns into a Marxist analysis of politi
cal economy. This interpolation is not uncontroversial; some
scholars have argued that ‘red’ and ‘green’ agenda cannot be mixed
in this way. Marx himself was uncritical in his appreciation of
capital-intensive technology and could not see the environmental
havoc that industrialization entails. Therefore the attempts to find
an authentically ecological outlook in Marx’s philosophy of nature
cannot be successful (Clark 1989).
The neglect of an ecological perspective in Marx’s own work
is not an oversight. Marx was conscious of the Malthusian argu
ment that natural limits such as a slowly growing food supply
would act as a brake on social betterment. But he concentrated
on rebutting Malthusian ideology by adopting an essentially
Ricardian view of social rather than natural limits to capitalism.
That is, Marx chose to stress that the rocfo/relations of production
need to be transformed to fully realize the fruits of technological
development. Therefore, Marx’s core concept of the labour
NATIONAL DEVELOPMENT. POVERTY AND THE ENVIRONMENT
38
39
IN THE BELLY OF THE RIVER
process underrepresents the significance of natural conditions
which cannot be manipulated and overrepresents the role of
human intentions and powers for transforming nature (Benton
1989:64).
But at a deeper level, Marx implicitly supports environmen
talism by opposing commodification — a process which divorces
all products (fashioned by human labour working with nature)
from their intrinsic worth, and reduces them to a common
economic matrix. Marx’s critique of capital depended fundamen
tally on his critique of commodity fetishism, which is an epis
temological critique of economism and development, with their
corollary of environmental destruction. In this more profound
sense, Marx anticipated the class and nature problematic.
Resistance to Development:
Party' Politics versus Social Movements
The process of development has not been easy or straightforward;
it has been continually contested by competing groups of elites,
within and between nation states (Evans and Stephens 1988).
More critically, the attempts of elites to exploit in the name of
development have been challenged and collectively resisted by the
very people that they have sought to marginalize. Popular protest
has occurred at many different levels, and has had many different
objectives — from retaining access to natural resources, to getting
a fairer deal in the work process, to asserting cultural autonomy
— but it has been ultimately unified by its attempt to decentralize
power into the hands of rhe exploited majority so that they have
more control over their lives.
In India, among the many struggles against national ‘develop
ment’, one has received increasing scholarly attention in the last
fifteen years — resistance in the form of social movements. Even
though social movements tend to be small and localized while
trade unions and peasant parties have large followings, it is the
former which have become the subject of scholarly treatment.
This academic shift, similar to that which occurred in Europe,
is due as much to the resurgence of this form of protest as to
the intellectuals’ own ideological disillusionment with electoral
politics and mainstream socialist politics. Kothari argues that
these movements are ‘really to be seen as part of an attempt at
redefining politics at a time of massive attempts to narrow its
range, different from electoral and legislative politics which has
relegated large section s of the people outside the process of power’
(Kothari
46).
In part,1988:
intellectuals
seem to have surrendered their interest in
state power as an arena of struggle because of the failure of
progressive mass-based parties to form stable governments at the
national level. Several reasons are offered for this: party politics is
corrupt and comprom ised; it contains inherent tendencies towards
centralization; in any case, new institutional spaces are opening
up at the grassroots. By espousing the cause of new social move
ments, intellectuals have filled an analytical void created by their
perception of the failure of bourgeois democracy.
New Social Movements in India and Europe
The surge of Indian scholarly interest in social movements parallels
that which has occurred in western Europe at the same time,
around Green movements — a number of closely related actions
on the issues of nuclear disarmament, peace, feminism, and the
environment9. Intellectuals discussing these movements make
claims similar to those made by Indian scholars about their
politics: ‘the sphere of action of the Green movements is largely
a space of non-institurional politics which is not provided for in
the doctrines and practices of liberal democracy and the welfare
state’ (Offe 1985: 826). For their difference from mainstream
politics, these movements have even been called ‘antipolitics’
(Berger
In the1979).
European context, Green movements are perceived to
be a departure from the orthodox Marxist concerns about the
centrality of work and class relations in defining the lines of social
conflict. As Rudolf Bahro said, ‘some comrades, whose way of
thinking is fixated on a past era that cannot be brought back,
speak staunchly of a will too low level of class struggle. You fail
to see that the emp-eror has no clothes. The world-historical
9 While all these issuer. have separate and noble lineages of struggle which
long pre-date the Green —yavement, the new social movements claim to be new
precisely because of the «vy in which they have woven these different strands
of social action into one .nified agenda.
•••’
• w • • • “ • • nsrm Ti’iin u i i it
mission of the proletariat was an illusion . . . ’ (Bahro 1982: 57).
He goes on to say that the emergence of the ecology movement
signals that countless people who are not mobilized by specific
economic class interests proclaim and organize their resistance in
diverse ways (Bahro 1982: 107).
Intellectuals of Indian social movements share with their
counterparts in the European Green movements a critical unease
about party politics, a wariness that has been expressed in selfconscious deliberations about the relationship between parties and
movements. Apart from this similarity, can these social move
ments be seen as ‘new’ or ‘antipolitics’ in the Indian case? Unlike
Bahro’s emphasis on the absence of concerns about class issues in
the Green movements, social movements in India continue to
centre on the conflict over production relations. While the
European experience has been called a shift from ‘red’ to ‘green’
— that is, from Marxism to environmentalism, the Indian politi
cal process seems to be tinted in both hues. The struggle over
nature, for example, has an inherent class dimension because
nature also provides resources which are the bases of production.10
Unlike Europe, where ecological crisis is perceived equally as a
threat to biological survival in global terms, in India conflicts over
nature tend to closely follow the battle lines between those who
produce and those who own the means of production (Guha
1988: 2578).
However, in one respect, scholarly interest has moved away
from the consideration of one set of productive resources to
another which had earlier been peripheral to the concerns of
political organizations. From an examination of conflict in the
factory and the field, intellectuals have moved to study conflict
around forests and rivers — a shift which is sometimes perceived
to be a move towards a ‘green’ agenda of ecological sustainability.
As may be apparent, the Indian exercise of defining what is
‘environmental’ and what is not, is somewhat arbitrary. Whereas
conflict around agricultural land tenure and use, or around the
workplace, is usually not treated as environmental, conflict
around forests or water resources is deemed to be quintessenrially
10 Of course, as O’Connor points out, the meanings attributed to nature
arc not exhausted by its use as natural resource; ecological politics are about
'class issues even though they are more than class issues’ (O'Connor 1988; 37;
emphasis in original).
NATIONAL DEVELOPMENT, POVERTY AND THE ENVIRONMENT 41
environmental. This distinction is hard to maintain because land
management is also of critical ecological importance, and con
frontations over forests are also about the ownership and control
of the means of production. The unexamined presumption that \
conflict over forests and water is environmental and that over '
agricultural land is not, stems, I would speculate, from the class !
background of the scholars who make these classifications, and ;
who tend to see forests and rivers as ‘wilderness’ (and therefore 1
‘nature’ and ‘environment’), and not primarily as sources of
livelihood. That is, an upper-class view of what is environmental
prevails. For most rural communities, there seems to be a con
tinuity in the way in which land, forest, water and other resources
are regarded, primarily as sources of subsistence.
In the Indian context, the inseparability of. and continuity
between, the ‘red’ and ‘green’ agenda is asserted by Ramachandra i
Guha, who observes that the material structure of society serves i
as the ‘landscape of resistance’ for people fighting against exploita- '
tion. While social relations and forces of production limit the
forms a culture (and within it, resistance) may take, our analysis
42
IN THE BELLY OF THE RIVER
has to include not only the economic landscape but also the
natural setting in which the economy is embedded. For, while
production relations sharply define the boundaries of political
structures and cultural systems, they are in turn limited by the
i ecological characteristics — the biota, topography, and climate
— of the society in which they are placed (Guha 1989a: 5—6).
While Guha’s notion — that ecological specificities limit and
modify social relations — is an important corrective to theoretical
approaches that ignore the environment, by itself this does not
! constitute a ‘green’ agenda. Environmentalism is not concerned
■ simply with nature per se, it is concerned with the sustainable use
of nature. It is generally thought that sustainability has been the
attribute of economies organized for subsistence, as opposed to
profit. The low-intensity use of nature to meet basic needs is
ecologically sustainable, for it maintains the regenerative capacities
of natural resources. Thus, the struggles of rural communities for
retaining control over natural resources for subsistence can be
interpreted as embodying a ‘green’ agenda of environmentalism.
'
The Ideological Dimensions of Social Movements
Ecological conflicts in India are continuing struggles over produc
tion and extraction. The history of forest conflicts, for instance,
has been a long battle between the state which sought to incor
porate the forest into a profit-economy, and local communities
who fought to retain its place in their subsistence economy (Gadgil
and Guha 1989). However, collective action over natural resources
not only raises questions about ownership and control, it is also
a claim about different relationships with nature. As E.P. Thomp
son said, ‘Every contradiction is a conflict of values as well as a
conflict of interest.’ New social movements too are seen as for
mulating a far-reaching critique of the ideology of development,
rejecting its claims that the ever-increasing exploitation of humans
and nature constitutes progress, and reshaping people’s ideas
about what is socially good and desirable. Besides the contest
between two versions of economics — the political economy of
profit and the moral economy of need — this critique is believed
to extend to a repudiation of the underlying cultural values that
are privileged by the ideology of development — the ecological
hubris of trying to attain mastery over nature, the economism that
NATIONAL DEVELOPMENT. POVERTY AND THE ENVIRONMENT
43
ranks profit over all else, and the pursuit of technological expertise
which dominates over other, more egalitarian and ‘organic’ ways
of knowing the world. This harks back to European claims that
Green movements are not sparked by 'problems ofdistribution, but
concern the grammar offorms of life’ (Habermas 1981: 33; em
phasis in original).
According to Ramachandra Guha, in India the environmental
critique of the values ofdevelopment builds upon three ideological
streams (Guha 1988). The first, which he calls ‘Crusading
Gandhian’, upholds the pre-capitalist and pre-colonial village
community as an ideal of social and ecological harmony. It
criticizes the domination of modernist philosophies such as ration
alism and economism, and propagates an alternative philosophy
which has roots in Indian tradition. The second stream, called
‘Appropriate Technology’, is influenced by socialist principles but "
reconciled to industrial society. It emphasizes the liberating poten
tial of resource-conserving, labour-intensive technologies. The
third stream, that of‘Ecological Marxism’, holds that political and
economic change must be prior to ecological concerns, and col
lective action aimed at systemic transformation must come first.
This stream is philosophically at odds with Gandhian values
because of its overall faith in the emancipatory potential of modern
science and technology. While conceptually separate, these
ideologies have been influential in modifying each other. The
Gandhian critique of modern science has muted the celebration
of technicism by the Marxists, while the Marxist analysis of ex
ploitation has compelled the Gandhians to incorporate a more
egalitarian perspective on social change. The result of this cross
fertilization is an environmentalism which builds upon the
strengths of these different ideologies to construct a far-reaching
critique of the values underlying ecologically destructive develop
ment.
Another stream of Indian environmentalism, although not a
critique ofdevelopment per se, is that of preservation. One of the
earliest and most celebrated instances of preservation was Silent
Valley in south India where the central government overrode the
protests of the state government and local people and cancelled a
proposed hydroelectric project in a pristine tropical rainforest
(Herring 1991). Prompted by the international call to save
biodiversit}', and the urging of preservationist groups such as the
« r rrrrrr u • R^R < • • • v v • r<^«» wrrrrriii vti
44
IN THE BELLY OF THE
Bombay Natural History Society, the Indian government has
made several ‘wilderness’ areas off-bounds to local users by desig
nating them as national parks. While the creation of parks and
wildlife sanctuaries has facilitated environmental conservation,
this is preservation by fiat, for local people’s rights have usually
been overlooked and they have rarely been involved in management. This has also contained environmental action to a sphere
of low overall impact for, through its other policies, the govern
ment has continued to pursue the environmentally destructive
goal of industrial growth. Preservation has tended to be a token
effort, creating islands of endangered wildlife which are perpetual
ly encroached upon, resented by the people who live near them".
NATIONAL DEVELOPMENT, POVER1V AND THE ENVIRONMENT
•
I
45
between human evolution and the protection of forests (Parajuli
1991: 179). Vandana Shiva and J. Bandyopadhyay reiterate this
theme when they speak of the cultural lessons of diversity and
democratic pluralism learnt by Asian societies ‘modelled on the
forest’. They proceed to,claim that
the forest as the source [of life] also means that forests and trees must
be treated as sacred. The sacred is inviolable: its integrity cannot be
violated. If Asian civilizations have survived over centuries it is because
they learnt to be like the forest, sustaining both the forest and the culture
through time . . . For these cultures, all life, both human and non
human, is in symbiosis. Human society is not predatory but in rhythm
with the forest (Shiva and Bandyopadhyay 1990: 67, 77).
Overlooking the glib biological analogies here, informed as they
are by functionalist notions of homeostatic social systems, this
basic view that adivasis are sustainable managers has gained wide
acceptance today among intellectuals writing about development
and resistance. The practices of adivasis are said to exemplify ‘the
life-enhancing paradigm’ (as opposed to the modern ‘life-destroy
ing paradigm’) where ‘renewability is the primary management
objective’ (Shiva and Bandyopadhyay 1990: 74; emphasis in ori
ginal). It is declared that
’
Indigenous People as Embodiments of Resistance
Guha’s categorization of the ideological bases underlying Indian
environmentalism can be extended to include another stream,
similar in its values to the Gandhian, but rooted in a different
tradition: the belief that the cultural beliefs and practices of‘indi
genous communities’ constitute a critique of ecologically destruc
tive development and provide an alternative vision of a sustainable
human-natiire relationship.12 It is claimed that over centuries of
living sustainably with nature, adivasis have acquired a deep
knowledge and understanding ot ecological processes so that they
are ideal natural resource managers (Shiva and Bandyopadhyay
1990: 77). Thus, scholars of social movements say that ‘rural
women and indigenous people . . . still retain the aranya sanskriti
[forest culture] which is based on the creative interdependence
... all serious studies of natural resource use by indigenous peoples
show that their traditional ways of life have been brilliantly conservationist. . . [T]heirs is an ecological wisdom that is intricately woven
into the very fabric of their cultures; for the most part it is not an
articulated, conscious ‘body of knowledge’ . . . (T]heir entire way of
life expresses an ecological wisdom that enables them to take care of
I
i
their forest environment (Taylor 1990: 184).
.
:
I
11 A classic case of a conflict between park officials and villagers occurred in
November 1982 when people living around the Bharatpur bird sanctuary were
barred from exercising their traditional rights to graze cattle inside the sanctuary.
The subsequent clash resulted in police firing that killed one person (Prasad
and Dhawan 1982).
12 Like ‘environment’, ‘indigenous’ is hard to define. The term is problematic
outside its original context of the Americas where, historically, there has been
a sharper differentiation between ‘natives’ and European settlers. The use of
‘tribe’ as an alternative is also difficult because of the porosity of the boundary
between ’caste’ and ‘tribe’, both of which have existed side by side for centuries
in India (see Chapter 4). I shall avoid controversy by using 'aJiuasi'(literally
‘original dwellers’), a widely accepted Indian term; Hardiman presents a per
suasive case for this usage (Hardiman 1987b: 11—16).
r
Thus, indigenous ways of knowing, which people are unable
to articulate or even be conscious of, are expressed ‘on their behalf
by intellectuals.
This view of the adivasis as ecologically noble savages is not
unique to India; it is frequently voiced across the world among
conservationists concerned about saving the forest. In Europe,
the noble savage was first the idealized vision of Rousseau,
Thomas Moore, and others, of the inhabitants of the New World.
The belief that native Americans ‘lived in close harmony with
their local environment’ was resurrected in this century among
conservationists. Paralleling Shiva and Bandyopadhyay’s
‘
46
IN THE BELLY OE THE RIVER
conceptualization, the modern world was seen as being divided
into ‘two systems, two different irreconcilable ways of life: the
[Native American] world — collective, communal, human,
respectful of nature, and wise — and the western world — greedy,
destructive, individualist, and enemy of nature’ (from a report
to the International NGO Conference on Indigenous People and
the Land 1981, quoted in Redford 1991: 46).
The belief that adivasis in forests everywhere are conservationist
also recurs among north American Deep Ecologists, who see their
philosophical principle of ‘biocentrism’ (as opposed to ‘anthro
pocentrism’) realized in eastern religious traditions and, at a more
popular level, by ‘primal’ indigenous people in non-western set
tings who, through their material and spiritual practices, subor
dinate themselves to the integrity of the biotic universe they
inhabit. The coupling of (ancient) eastern and (modern) ecological
wisdom seemingly helps consolidate the claim that deep ecology
is a philosophy of universal significance (Guha 1989b: 73-6). In
India, rhe view that ‘traditional’ religious worldviews depict the
innate ecological sensibilities of Indians is found in the writings
of Vatsyayan (1992) and Banwari (1992), who interpret Vedic
rituals and myths as embodiments of environmentalism.
According to this environmentalist view, in the knowledge and
belief systems of the adivasis lie our hope for the future. The
wisdom of‘indigenous’ people is thought to have contemporary
relevance, for it is believed to be inherently ecologically sound, as
proved by their sustainable survival strategies (Redclift 1987: 153).
This wisdom, then, forms the philosophical foundations of
present-day social movements of people who resist and challenge
the dominant ideology of development. ‘In the third world today
the alternatives [to development] are often there in the present,
surrounding the islands of barricaded modernity’ (Nandy 1987:
88). It is claimed that adivasis, who have been marginalized by
development, can mount a thorough going critique of it and,
through the example of their ecologically wise culture, present an
alternative vision of sustainable, ecologically respectful living with
nature. Such a cultural critique and alternative is not merely an
abstraction; it is realized in the present through social movements.
Thus, ‘new social movements arc . . . sites of creating and regen
erating [the] subjugated knowledge . . . [of] indigenous people,
women, and other marginalized groups. . . ’ (Parajuli 1991: 183).
NATIONAL DEVELOPMENT, POVERTY AND THE ENVIRONMENT
47
The collective resistance of indigenous people is not a rearguard
action — ‘rhe dying wail of a class about to drop down the
trapdoor of history’ — but a potent challenge which strikes at the
very heart of the process of development.
The Formulation of an Agenda for Research
1 formulated my research hypothesis after being influenced by the
preceding theories. I expected that adivasis acted politically in
response to their experience of development — a process which
has resulted in the alienation of their natural resource base and
their subsequent cultural impoverishment. That is, they come
together in a social movement to collectively resist the appropria
tion of their resources by state and market. The conflict between
| social movements and the state is not simply that of differing
1 interests but, equally profoundly, that of differing values. As
1 people not fully incorporated into the state and the market,
adivasis can draw upon traditional values such as reverence for
nature as the source of their cultural critique of development and
the basis of their resistance. This resistance is not merely reactive;
through it, adivasis construct a creative alternative to the dominant
and destructive system of development, based on their tradition
of living sustainably with nature.
The ongoing struggle of the adivasis in the Narmada valley in
central India seemed to be a living example of the resistance of
‘indigenous’ cultural communities to development. The Indian
government plans to dam the river Narmada, harnessing its water
for irrigation and power generation. The reservoir of the dam will
submerge an area of forested hills, displacing the adivasis who
subsist upon this environment. Their fight against displacement
appeared to be intrinsically an environmental movement, for did
they not worship nature and use it sustainably? While the dam
was both a part and a symbol of development, the movement
against the dam seemed to embody cultural resistance and an
alternative to development. This alternative extended to the very
mode of political action in which adivasis engaged — decentral
ized, grassroots mobilization which challenged the authority of
the state to act ‘on behalf of the people. The Narmada Bachao
Andolan (Save Narmada Movement) represented the marginal
ized, uncorrupted ‘alternative political culture’ of the adivasis. I
48
IN THE BELLY OF THE RI(
intended to go to the Narmada valley and, by living with the
adivasis, discover their relationship with nature, how it changed
with their experience of development (which included the dam),
and their struggle to create an ecologically sustainable and socially
just alternative world.
On going to the Narmada valley, I discovered a somewhat
different reality. I had earlier believed that the movement against
the dam was the only way in which adivasis acted politically; I
found that they were also organized into a Sangath (union) which
fought for adivasi rights to land and the forest. Moreover, this did
not exhaust adivasi politics; people participated with enthusiasm
and great energy in waging and settling village-level feuds about
honour. Fieldwork revealed that there were several different levels
of politics, and that it was essential to incorporate all of them into
the study in order to better appreciate adivasi life.
More disconcerting, though, was the rapid discovery that
adivasi life was not at all what I had imagined it to be. My
expectation that I would encounter a community which lived in
harmony with nature, worshipping it and using its resources
sustainably, turned out to be both true and false. Therefore my
neat theoretical framework linking nature-culture relationships to
political critique, action and change, crumbled into an untidy
jumble of contradictions. The dissonance between my romantic
notions of adivasis, based on scholarly writing on the subject, and
the everyday lives of adivasis, led me to ask the questions that run
through the subsequent pages: What is the adivasi relationship
with nature today? What is their relationship with the state? How
do people, whose struggles are the subject of theories of liberation
and social change, perceive their own situation? How accurately
does the environmentalist critique of development represent the
lives of the people who are thought to be at the forefront of
environmental movements? While these issues have been analyzed
in relation to the Bhilalas of Alirajpur who live in the submergence
area of Sardar Sarovar dam, they bear upon the lives and struggles
of adivasis elsewhere, who share a past and a present of develop
ment and resistance.
C®rv)
F
>
q
Economic Reforms, Nature and Poverty ; 5
> ^2^
M H Suryanarayana
^Recent studies show an increase in poverty in the wake ofthe 1991 economic reforms. Explanationsfor thesefinding's range-.'
>
from insufficient reliability of the NSS data base to 'nature' or bad harvest and only (ndirectly to the reforms. This paper'".
i
re-examines these hypotheses using the same data source combined with official macro estimates on het cereal availability?*'''
changes in cereal stocks, PDS allocations and offtakes of cereals.
■
I
Introduction
on cereal price increases on the basis of
estimates of increases in average prices of
cereals in the rural and urban areas by states
and all-India using unit values from the
NSS. But cereals constitute only a major
subset of the food basket and cereal prices
alone cannot capture the aggregate price
change. Therefore, we do not attempt to
estimate poverty measures, Instead, we
examine the T-J explanation by looking
into changes in quantities of cereal
consumption by different decile groups by
rural/urban sector at the all-India level and
by sectoral total populations at the state
level. This seems valid because cereals still.
account for about 60 per cent of the consumer
budget of the poor. Since T-J’s argument
is essentially in terms of reduced availability
and entitlement of cereals in the rural areas,
our focus on cereal consumption scctns
appropriate.' The paper also provides
evidence by examining macro estimates of
net per capita cereal availability and
allocations for and offtake of cereals from
the public distribution system (PDS) and
their implications for poverty.
The paper is structured as fol lows. Section
II summarises the T-J findings, hypotheses
and explanation. Section III subjects the
T-J method of estimation, hypotheses and
explanation to some verification; sub
section Ill.i examines the appropriateness
of the price indices used by T-J and sub
section Ill.ii measures the actual changes
in cereal consumption and their implications.
Section IV discusses some macro evidences.
FROM the comparative experience of many
other developing economies, the orthodox
economic reforms initiated since July 1991
have generated considerable apprehension
about the likely adverse impact on the ‘poor
anj^vulnerable* sections, an effect called
th^^icial cost of adjustment. Given the
country’s low endurance capacity due to
unemployment, poverty and deprivation,
constant monitoring is called for to formulate
policies so as to implement the reform
programme with minimum social costs
[Comia et al 1987a and 1987b; Stewart
1995; Taylor 1988 and Taylor 1993],
Preliminary findings based on the National
Sample Survey (NSS) data on consumer
expenditure show a pronounced increase in
rural poverty and virtually no change in
urban poverty [Gupta 1995; Tendulkar and
Jain 1995].’ Explanations for the observed
changes in poverty range from ‘insufficient’
reliability of the NSS data to ‘nature’, that
is, a bad (below normal) harvest.
Commenting on the Planning Commission’s
finding in its draft mid-term appraisal of
the Eighth Plan that poverty had increased
from about 18 per cent in 1990-91 to 2021 pAatin 1991-92 and 1992-93, Shankar
Acha^a, chief economic adviser of the
ministry of finance, points out that these
findings are based on ‘thin’ sample results
which are “insufficiently reliable”.2
Contrasting the rural-urban variation,
Tendulkar and Jain (T-J hereafter) attribute ■
the increase in rural poverty largely to
Nature and Increase in Poverty
‘nature’. They further conclude that
“economic reform-related decisions
T-J estimate (I) the headcount ratio, (2)
contributed indirectly rather than being the
only or even the major cause of the sharp the poverty-gap index (a measure of depth
accentuation of rural poverty during the of poverty) and (3) the FGT' (a measure
period under consideration" [T-J of severity of poverty) for both rural and
1995:1376], Gupta (1995) examines the urban all-India for 1970-71 to 1992. They
social costs of. the programme in some use two alternative poverty lines, namely,
detail and concludes that the costs are high (1) the official poverty line of monthly per
capita total expenditure (MPCTE) of Rs
enough to demand corrective action.
This paper attempts to examine the 49.09 and Rs 56.64 (urban) at 1973-74
stimated changes in poverty during the prices used by the Planning Commission
ast-reform years and their empirical bases and (2) an alternative lower poverty line
ising the available NSS data for July 1990- of MPCTE of Rs 15 (rural) and Rs 18
une 1991 and January-December 1992. (urban) at 1960-61 prices. They account for
he study shows that the findings on diverse - inflation by updating these poverty lines
rral-urban changes in poverty could largely with theconsumer price index for the middle
e the result of outdated price index for the range (CPIMR) of the rural and urban
tral areas. We verify the T-J hypothesis population worked out from detailed price
n
data. Such price indices are used only for
the period 1970-71 to 1989-90.' For the '
remaining years, the updating is done using
price adjustment factors by applying the'
rate of growth in the consumer price index ■
for agricultural labourers (CPIAL with 196061 as the base year) to rural CPIMR and'
the consumer price index for industrial
workers (CPIIW with 1981-82 as the base.
year) to'urban CPIMR.
All the poverty measures 'show'
consistently an increase in rural poverty
and ajTiong these measures the poverty-gap
.index shows sharper and the FGT" measure
even sharper increases in rural poverty. TJ's estimates show virtually no change.in
urban poverty in 1991 and a marginal
increase in 1992
(T-J 1995: Tabled,
p 1374). T-J explain the accentuation inrural poverty in terms of a sharp reduction •
in the CPIAL-adjusted real average per
capita total expenditure (APCTE) by 5.5
percentin 1992 over 1990-91 andanincrease
in relative inequality as measured by the
Gini coefficient. This is the all-India picture.
T-J results for states indicate that the
rural areas in Andhra Pradesh, Assam, Bihar,
Karnataka, Maharashtra and Rajasthan
experienced “reasonably sharp reduction in •
real APCTE" and hence sharp increase in
poverty in the post-reform period?
'
T-J explain the increase in rural poverty
in terms of a bad agricultural harvest and
decline in food (mainly coarse cereals and
pulses) output and the consequent reduction
in employment and incomes. The problem
got accentuated mainly by a steep hike in
the open market prices of wheat and rice
caused by (i) speculative stock holding by
farmers and traders; (ii) the periodic '
increases in the procurement prices of nee.
and wheat to compensate the farmers for
withdrawing subsidies on fertiliserst and
(iii) the increases in the central issue prices'
for the PDS. The same factors might not
have operated in the urban sector, for the.
urban consumers are relatively protected by
the universal (untargeted) urban PDS?
Moreover, procurement for the urban PDS■
and the relatively stronger urban demaiitfs.'
contributed to increases in rural food prices^.
further, worsening the plight of the rural
poor. Therefore, T-J do not consider the
reforms to have directly contributed to'"
increases in rural poverty. EvenJhougjy
there has been a squeeze on anti-poverty,
programmes as part of fiscal compression..^
of Average Prices (Unit Valves) for Select Cereal Items for ti.i: Rural Total Population by State
’Stale
-•;.*» ■ . •
1990/91
1992
Wheat
1992 ■
1990/91
3.42
4.76
4.65
4.55
6.41
4.53
4.54
4.16
4.84'
4.01
4.88
5.50,
4.60
3.69
4.88
4.33
5.23
5.94
6.08
5.95
7.00
6.26
5.81
5.26
6.00
4.99
4.00
6.00
5.61
5.13
5.82
5.59
4.69
3.66
3.76
3.10
2.57
4.00
4.32
2.88
■ 3.74
4.00
2.69
2.73
4.32
2.48
3.80
2.93
.. •.
"jMidhra Pradesh
.--Bihar-v
^Gujarat ■M.
etr: Haryana ’
""Karnataka
.^hfadhya Pradesh
Maharashtra
m Orissa , . . ■
«• Punjab^---' •
'•■^Rajasthan
"•"Tamil Nadu
■
^Uttar Pradesh
' West Bengal
-*4AU-India .
4.50
3.67
4.68
4.59
3.33
4.56
5.44
4.32
5.04
5.22
3.41
3.95
4.67
3.46
5.00
3.98
1990/91
_____ Maize
Jo war_____
_____ Quia____
1992
1990/91
1990/91 ' 1992
1992
Total Cereal
1990/91
199
2.32
4.14
3.28
4.71
4.18
3.24
2.72
3.38
4.52
3.09
3.29
3.97
2.83
2.71
4.35
2.80
4.77
3.53
-
—
2.85
—
2.60
—
1.79
2.24
2.00
—
2.45
2.67
1.91
2.31
■
—
4.80
—
4.88
3.78
4.24
0.00
—
3.00
4.00
8.00
—
4.28
—■
2.79
1.75
—
1.39
2.75
1.00
—
2.54
2.49
1.90
—
2.51
.
—
4.09
3.00
—
2.00
3.85
0.00
—
3.93
3.00
2.50
-'
3.85
2.70
2.18
—
2.48
2.04
2.50
0.00
3.73
2.37
—
1.98
• —
2.31
4.00
3.50
—
4.00 '
—
3.57
3.00
o.oo
5.50
3.88
—
2.33
—
3.41
5.11
5.84
5.45
. 4.57
3.48
5.00
5.78
4.59
4.76
4.92
3.50
3.97
5.34
3.90
■ 5.73
4.81
"^Source: Author’s computations based on Gol (1993b and 1994).
Table 2: Estimates of Average Prices (Unit Values) for Select Cereal Items for the Urban Total Population by State
Estate.
• - ...
•
".^’Andhra Pradesh
Assam
.’-Bihar .- .
Gujarat..
■'Haryana.- .
Karnataka
' Kerala''
(^Madhya Pradesh’
.....Maharashtra
Orissa.
^Punjab. c
Rajasthan
" Tamil Nadu
'“Uttar Pradesh
, v¥fest Bengal
^Ali-India;. '
’
Rice
1992
1990/91
Wheat
1992
1990/91
4.26
5.15
5.11
5.47
6.01
5.14
4.67
4.92
5.28
4.25
554
6.55
5.08
4.66
5.48
4.97
4.59
4.57
3.78
3.47
3.10
4.58
4.22
3.43
4.08
3.89
3.35
3.23
4.16
3.21
3.83
3.56
6.13
6.84
6.50
7.13
6.34
6.84
5.72
6.30
7.21
5.61
7.32
8.74
6.37
6.14
6.65
6.46
i
5.74
6.58
5.07
4.88
4.01
6.10
5.99
4.64
5.91
5.29
4.02
4.32
5.48
4.09
5.12
4.72
Jowar
1990/91
1992
2.64
—
3.27
—
2.89
—
2.49
2.84
—
—
2.00
3.00
1.67
2.80
Bajra
1990/91
1992
4.50
—
—
—
—
5.46
3.Q01"
—
2.00
2.50
5.33
4.14 ' •*- 2.33
5.11
■3.00
—
—
2.50
2.63
4.67
0.00
1.67
5.06
2.85
-
4.34
2.29
0.00
5.00
4.63
4.31
—
4.00
4.18
Maize '
1990/91
1992
Total Cereals
1990/91
1992
—
2.75
2.50
N.A.
• —.
2.20
—
—
3.90
3.30
—
3.20
5.00
—
—
4.25
2.25
—
5.00
3.92
—
3.00
2.60
—
2.80
3.40
4.21 .
5.08
4.47
3.81
3.34
4.40
4.61
3.86
4.29
4.15
3.58
3.29
4.98
3.53
5.05
4.20
6.04
6.81 '
5.80
5.42
4.17
6.07
5.75
5.20
6.21
5.51
4.32
4.50
6.26
4.51
6.29
5.56
'Source: Author’s computations based on Go! (1993b and 1994).
"■ Table 3; Percentage Increases in Average Prices of Select Cereal Items in 1992 over That in 1990-91 by Statewise Rural and Urban Sectors
"'State'"
"Andhra Pradesh ’
Assam ‘ ;
Bihar
'
..Gujarat . .. .. .
./Haryana...,, ...
.-.•Karnataka oKeralar..7." •
Madhya Pradesh
Maharashtra
Orissa " ■
•
/.Punjal)"
' *
.., .Rajasthan,
...Tamil Nadu
“. Uttar Pradesh
-•West Bengal
■’AU-India*'..
Rice
Rural
Urban
52.67
24.96
30.86
.
. 30.76
9.19
38.28
' 27.98
26.35
24.03
24.65
<-J18iOO
9.09
22.04
38.88
19.27
29.25
-
43.91
32.88
27.35
30.39
5.46
33.05
22.58
27.98
36.48
31.91
32.06
33.39
25.36
31.65
21.31
29.90
Rural
Wheat
Urban
(-M.I0
0.15
24.57
47.96
29.48
13.89
25.96
49.96
34.85
30.56
26.58
45.00
8.07
39.41
31.48
35.98
25.17
44.15
34.03
40.84
29.07
33.16
42.00
35.09
'44.92
36.23
20.17
33.79
31.62
27.39
33.71
32.74
Rural
78.28
—
t—.
68.21
87.94
—
11.41
89.64
• —.
22.22
50.00
». i
85.13
Jowar
Urban
Bajra
Rural
Urban
Maize
Rural
Urban
70.69
—
&7.06
—
—
—
46.65
71.43
84.79
—
66.34
80.01
-
—.
43.75
39.68
44.64
14.63
41.82
32.00
60.98
—
114.29
54.44
75.13
20.00
127.27
54.92
63.92
47.32
63.44
_•
17.65
73.72
31.58
I—<
. 53.51
140.00
Li
18.11
_
W13.33 '
46.54 .,
47.60
21.43 '
—
25.00
55.56
■i —
■ —■
80.80
48.33
60.63
Total Cereals
Urban
Rural
55.74
24.00
30.43
40.90
2750
48.14
’ 27.74
48.46
44.74
23.96
23.50
46.86
22.85
39.38
20.22
36.30
43.44
34.00 '
29.84
42.19
24.86
37.95
24.67
34.72
44.96
32.73
20.69
36.82
25.70
27.55
24.49
32.44
Sourced Based on Tables 3 and 4.
Xi 8^
Pnnnnmin nnrf Political Weekly
March 9 IQ96.
(
c
c
c
€
they absolve the government on the grounds
that (i) the central programmes have never
been on a scale required to prevent a sharp
increase in rural poverty, (ii) these
programmes are ineffective due to
organisational and delivery problems, and
(iii) they are not as effective as drought
relief works. They underline the decline in
coarse cereals and pulses output as a cause
of increase in rural poverty since many of
the states which experienced sharper
reductions in rural real A PC i b arc major
producers and consumers of these crops.
They corroborate their reasoning on rural
price increases by highlighting the relative
increases in theall-IndiaCPIALand CPIIW.
on the basis of which their poverty
calculations were also made.
m
Evident Is the Evidence?
Changes in Cereal Prices in Rural
and Urban Areas
the source of purchase. For example, items major urbanised states of Gujarat,’-'
obtained from home-grown stock are valued Maharashtra, Tamil Nadu and West Bengal '
at farm harvest prices and’those obtained and also in Assam and Orissa, . j’ "/
from the market at retail prices.
(iv) Most important, there were wide .
As one would expect, the average cereal dispersions in price increases in both rural <prices are higher in the urban than in the and urban areas across states. Tim extent ■
rural areas (Tables 1 and 2). The estimates of increase in average prices of total cereals/"
of percentage increases in average cereal varied between as low as 20.22 per cent
prices between 1990-91 and 1992 bring out rural West Bengal to as high as 55T4 per^.
the following salient features (Table 3):
cent in rural Andhra Pradesh. As regards»
(i) The differences in increases in average the urban areas, the increases ranged fronf“:cereal prices between the rural and urban 20.69 per cent in Punjab to 44.96 per ccnT
areas were marginal and not substantial as in Maharashtra. The average all-India ^
has been made out based on the CPIAL and increases in the prices of total cereals were,.the CPIIW [T-J 1995],
36.30 and 32.44 per cents for the rural and-s(ii) At the all-India level, the increase in urban areas, respectively. "
Such price increases must have implied’ '
prices was higher in the urban than in the
rural areas only for rice. For other cereals untold miseries for the bulk of the poor
and for the cereals basket as a whole, the participating in the food market, who spend
increase was more in the rural than in the more than half of their incomes on cereals/
urban areas.
Food market participation rates varyacross’
(iii) At the state-level, the increase in states and hence the extent of hardship of ~
average prices of total cereals was higher the population, the poor in particular, must
in the urban than in the rural areas in the have also varied similarly. Table 4 provides .
To begin with, the CPIAL is not an
Table 4: Market Participation Rates (Per Cent) for Rice and Wheat for Total Population by
appropriate price index for updating the
Sector and by,State, 1986-87
:
rural poverty lines as its weighting diagram
is based on 1956-57 consumption pattern.5 State
__________Rice_________
________ Wheat
The consumption patterns have changed
Rural
Urban
Rural '
Urban
perceptibly over the past four decades. To
Andhra Pradesh
80.88
93.33
4.40
27.71
1 .
illustrate, for the rural poorest two decile
Assam
48.91
91.06
16.67
33.37
groups coarse cereal share in total cereal
Bihar
57.99
85.72
48.05
74.78. ,C <•
consumption has declined from about 60 Gujarat
66.48
30.84
64.20
49.25 : -f percent in 1957 to about 20 per cent in Haryana
32.70
12.03
17.79
27.49. ~ ■ • *
1990-91 [Suryanarayana 1995a], Since Karnataka
86.11
94.98
40.93
67.53
coarse cereal prices have risen very sharply Kerala
94.97
97.17
. 26.62
37.00 ' ’ 1 >'■
- 38.56
63.16
72.79
28.27
due to fall in its output [Government of Madhya Pradesh
70.24
Maharashtra
85.80
88.57
59.33
India (Go!) 1993a], it is quite possible that
60.32
38.73
89.28
4.89
the CPIAL, with outdated and exaggerated Orissa
28.80
57.52
16.33
10.60
weights for coarse cereals, overstates retail Punjab
.53.06 . -iA
39.53
55.49
36.43
price increase in rural areas.6 In fact, the Rajasthan
Tamil Nadu
77.60
35.14
91.92
10.20
Eag^mic Survey for 1992-93 acknowledges Uttar Pradesh
34.41
64.41
70.69
31.25
tffl^[Gol 1993a:75]. Coarse cereal West Bengal
56.29 ' ’'' S-'»
67.55 • 95.08
32.90
consumption is lower in the urban sector Al! India
57.73
57.19
82.35
30.20
and given that the CPIIW under considera
•
. ;-.la
tion has an updated base and weighting Source: Gol (1990).
diagrams,’ the CPIIW may not be exag
Table 5: Proportion (Pe:r Cent) of Bottom-40 Per Cent of the Population Purchasing from only
gerating price increases to the same extent
Sources other than the PDS, 1986-87
as the CPIAL.' As Gol points out, the
Urban
Rural
State
CPIAL shows a higher rise in prices because
Wheat ■ -•
Rice
Rice
Wheat
of wide swings in the prices of essential
6.99
;
2.07
30.36
food items which have a higher wcighlage Andhra Pradesh
17.80
31.02
42.37
22.73
9.96
in the CPIAL than in the CPIIW [Gol Assam
63.75
83.90
43.04
55.53
1993a:76], This is, perhaps, a reason why Bihar
34.96
s
33.94
13.69
20.03
T-J get sharper increases in rural than in Gujarat
33.59 ■ i
46.79
19.41
Haryana
25.55
urban poverty.’
19.15
33.13
Karnataka
9.83
23.49
Let us examine the actual changes in Kerala
0.55
•’
7.92
0.15
5.61
cereal prices in rural and urban areas. The Madhya Pradesh
59.69
50.73
2.96
23.55
estimates of cereal prices provided inTables Maharashtra
46.43 ’■*
43.92
25.47
22.14
17.85
*"
1 and 2 are implicit in the sense that they Orissa
79.26
57.13
2.05
25.34 .. [•
53.28
1.62
11.27
are derived as unit values from the NSS Punjab
57.41
51.68
24.97
29.70
estimates of cereal consumption in value Rajasthan
3.86
35.48
21.47
0.43
and quantity terms. Such unit values are Tamil Nadu
66.37 ,
67.06
36.51
35.83
Uttar
Pradesh
estimates of average price/costs of cereals.
17.39
48.96
47.48
11.08
West Bengal
This is because the NSS estimates of values
33.87 umn
47.45
20.54
33.75
All India
of expenditures are obtained by differential
■
valuation of consumption depending upon Source'. Author's computations based on Gol (1990).
TTi-r.nnnvr- end Pn!S«S<->1
March 0
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SHASTRI
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620
'
Economic and Political Weekly
March 9, 1996
available estimates of market participation cereals in the rural areas, this method seems for the urban population. However, 'the’i5'
.. rates for rice and wheat by rural and urban appropriate. In addition this apptjpach allows pattern of decline acrossdeciiegfoupsdifiers'1*”'
sectors across states. These are estimates us to verify the cause-effect mechanisms between the rural and urban sectors,/The':?
of percentages of total population in terms of reduced agricultural and decline in total cereal consumption.-.was®*-'
purchasing rice and wheat from any source, foodgrain output, hence reduced incomes largely caused by a decline inrice-andW
that is, from the PDS or from any other and increased prices and their implications coarse cereal consumption for three bottom
source or from both obtained from the for poverty as emphasised by T-J. This is decile groups and by a decline in wheaTancI',1?
42nd round NSS on social consumption because both total expenditure and own coarse cereal consumption for- the lipper^
during July 1986-June 1987. Table 5 price elasticities of demand for different . decile groups in rural India. In urban India,-iw;
presents estimates of similar participation food items being higher (in absolute no such clear-cut pattern is discernible.'-*^
rates only in the open market (excluding magnitude) for the rural than for th'e urban However, a statewise analysis would provide'?
.. . , ■ i’-tS'
the PDS) for the bottom 40 per cent of population [Radhakrishnaand Ravi 1992], further insights.
the population.10 There is some positive one would expect larger reduction in cereal
At the state level, the NSS organisation
association between food market partici quantity consumption for the former than provides only estimates of sectoral (rural apation rates and percentage price increases for the latter for any given increase in cereal and urban) averages of MPCTE (total and
for both rice and wheat in the rural and prices and decrease in total income; all the by broad commodity groups) and’cereal ;?
urban sectors across states. Thus price more so if the price increases were higher consumption (value and quantity)? The" ’
increases have been higher in those states in the rural sector as shown by the CPIAL statewise sectoral estimates of quantities of,,,.
where the market dependence of the total in comparison with the CPI IW. Conversely, cereal consumption (Tables 8 and9) suggest
^^cll as poor population is higher. This a given reduction in urban cereal four types of experience (Table’IO)?3''1”*-'4*
.^Pt have rendered the poor in these states consumption could be interpreted as
(i) Contrary to T-J explanatiqnj^cereai?0’
much more vulnerable and miserable by indicatingap’roportionatelylargcrreduction consumption increased in the rural areas
reducing their economic access to food in entitlement and increase in urban Karnataka, Maharashtra, Orissa and Punjab^.
because of higher open market prices.
poverty.12
and decreased in their urban sectors, except-*';
Tables 6 and 7 provide estimates of /;iltban Karnataka where there was ■ marginal ’
Changes in Cereal Consumption
’
quantities of cereal consumption, total as . .increase;1’
(ii) Cereal consumption declined in both v.
To overcome the problem of dated price well as componentwise, by decile group?
index and hence that of poverty estimation, arranged in ascendingorderofconsump|i'6n the rural and urban sectors of Andhra«
we examine the actual cereal quantities for rural and urban all-India.11 They clearly Pradesh, Assam, Gujarat and West Bengal;-consumed by the different'decile groups of show a decline in the cereal consumption but the percentage decline was more in the?
thepopulationinboth rural and urban India." of both the rural and urban populations. As urban sectors;
■????.??
(iii) Cereal consumption declined in troth'.”
Since the T-J reasoning’ for an increase in one would expect, based 'on elasticity
rural poverty runs mainly in terms of a estimates, the percentage reduction in cereal the rural and urban sectors of- Haryana,-?;
decline in availability and entitlement of consumption was more for the rural than Madhya Pradesh, Rajasthan andTamil Naclti- '
Table 6: Cereal Consumption (Ko) Per Month by Decile Groups of Population, All-India Rural
Decile Group
Rice
0-10
4.43
6.78
7.23
6.87
7.26
7.63
7.89
7.83
6.60
6.98
6.95
V
30-40
40-50
50-60
60-70
70-80
80-90
90-100
0-100
July, 1990-June. 1991
Others
Wheat
• ’ 3.83
2.57
2.48
2.77
1.76
2.04
2.42
1.87
1.91
1.25
2.29
3.18
3.30
3.38
4.16
5.37
4.76
4.14
5.23
6.90
7.77
4.82
Total
Rice
11.44
12.65
13.09
13180
15.01
14.43
14.45
14.93
15.41
16.00
14.06
4.R0
6.37
6.86
7.10
7.59
7.82
7.98
7.97
7.86
7.16
7.16
January-December, 1992
Wheat
Others
Total
3.19
3.55
3.64
4.09
4.22
4.41
4.55
4.96
5.54
6.95
4.51
10.17
2.09
1.90
11.81
1.94
12.44
12.88
1.69
13.54
1.73
14.04
1.81
1.86
14.39
1.83
14.76
15.22
1.83
1.94
16.04
1.86 \ 13.53
Percentage Change in 1992 Over That in 1990-9 F*’
Total '
Rice
Others
Wheat
4.00
0323
(-)2.82
01.67
2.20
1.32
0.62
0.97
8.18
1.10
1.49
0.11
1.96
2.00
6)0.50
07.66
(-72.39
• 2.84
01.84
08.85
05.12
, 02.20
011.13????
(-) 15.24
05.33
(-J4.J2
07.85
(-)6.86
01.62
03.88
00.25
(-)0.54
' 4.27
03.06
06.61 !aWs*
(->4.95 rr-ss...
06.68
09.79
02.69
(•)I-12
0121
026
03.77
•
Source: Author’s computations based on Gol (1993b and 1994).
Table 7: Cereal Consumption (Ko) Per Month by Decile Groups of Population, All-Inoia Rural
Decile Group
Rice
0-10 ’
10-20
20-30
30-40
40-50
50-60
60-70
70-80
80-90
90-100
0-100
4.48
5.25
5.54
5.64
’5.36
5.64
5.66
5.46
5.12
5.06
5.32
July. 1990-June. 1991
Wheat
Others
’
3.23
4.28
4.37
4.69
5.00
5.07
5.07
5.17
5.36
5.47
4.77
-
1.48
- 1.04
0.79
0.79
0.76
0.63
0.65
0.58
0.47
0.32
0.75
Total
January-December, 1992
Total
Wheat Others
Rice
9.19
10.57
10.70
11.12
11.12
11.34
11.38
11.21
10.95
10.85
10.84
4.47
5.48
5.13
5.15
5.42
5.28
5.32
5.40
5.73
5.23
5.26
Source: Author's computations based on Go! (1993b and
4.11
4.05
4.48
4.72
4.91
5.20
5.14
5.04
4.72
5.44
4.78
0.82
0.86
0.80
0.83
0.98
0.53
0.48
0.45
0.34
0.31
0.64
9.40
10.38
10.41
10.69
11.31
11.00
10.94
10.89
10.79
10.98
10.68
Percentage Change in 1992 Over That in 1990-91
Total
Others
Wheat
Rice
(-)0.09
2.14
03.84
(-)4.40
0.54
0321
(-)2.98
.00.53
5.56
■ 1.53
(->0.55
9.53
<-)2.18
1.00
0.25
00.81
1.13
0.60
01.16
(-)5.85
00.23
0.09
07.21
01.72
0.13
0.32 >
1.98
■ (-)0.89
0145
(-)i.is
01.14
(->0.14
(-)l.Ol
. 2.24:: ’’
01J5,.Mii.
02.71*^
(-)3.83-jsJr>,02.97i»te
03.83«k*'1
02.84'-'''*1*
0f44
but tfie'pcrcenta'gc decline was less in the
urban areas. Yet, for reasons like ntralurban differences in consumer responses
mentioned earlier, this evidence cannot be
interpreted to indicate a faster increase in
rural poverty than in urban poverty in these
states;-'-— ■ (iv) Bihar, Kerala and Uttar Pradesh, by
eYperiencing a decline in cereal
'consumption in the rural areas and an
increasein the urban areas, provide a slightly
different picture.
"Thus, only Bihar, Kerala and Uttar
Pradesh'provide some support for the TJ hypothesis.” But the majority of the states
suffered greater percentage reduction in
cereal consumption in the urban than in the
rural areas. And what stands out is the
experience of the highly urbanised states
’of Gujarat? Maharashtra and West Bengal
which suffered greater percentage reductions
in the urban cereal consumption largely
because of a decline in wheat consumption
blit whose output had really increased in
1990-91'and 1991-92.” Among these states.
West Bengal is the state where the PDS is
highly urban-biased by all criteria (Dev and
Suryanarayana 1991]; yet its urban
population suffered larger percentage
reductions in cereal consumption in
comparison with the experience of the rural
population. This is the average picture
obtained for the sectorwise total populations.
Given that total expenditure and price
elasticities of demand are higher for the
poorerexpenditure groups than for the rich,17
the reduction in cereal consumption of the
poor in these states is most likely to be quite
substantial, especially in the urban sector.
IV
Macro Evidence
The results based on the NSS are further
corroborated by the official estimates on
per capita availability of cereals published
in the Economic Survey of the ministry of
finance (Table 11). Per capita availability
of cereals declined from 468.5 grams in
1990-91 to 434.2 in 1991-92 and further to
427.4 in 1992-93. These estimates of
availability are not adjusted for changes in
stocks with traders and producers. They are
therefore some s; . roximnte cVimater -..f ■
private cereal consumption,.Bui the decline
in cereal consumption was notdue to reduced
total availability. Against the government
allocation of 11.36 million tonnes of rice
and 10.36 million tonnes of wheat, the
corresponding offtake under the PDS was
only 9.94 and 8.78 million tonnes in 199192. In 1992-93, the allocation (offtake) was
11.48 (9.36) and 9.24 (7.41) for rice and
wheat, respectively. The offtake of total
cereals from the PDS (including quantities
released under the Food for Work
programme) has been declining since 1991;
from 20.8 million tonnes in 1991 (calendar
year) to 18.8 million tonnes in 1992 and 16.4
million tonnes in 1993. In 1992-93, there was
a net addition to government stocks to the
extent of 10.3 million tonnes. Thus reduced
cereal consumption in such a context only
indicates areduction in the purchasing power
of the people, the poor in particular.
What about 1993-94 which is now
declared as the year of poverty reduction?
NSS data are not yet published. Official
Table 8: Cereal Consumption (Ko) Per Month, Statewise Total Rural Population
Rice
July. 1990-June. 1991
Other
Wheat
Cereals
Andhra Pradesh
11.67
Assam
13.09
Bihar'’’' ‘
9.22
Gujarat'
2.59
Haryana
0.73
Karnataka
4.46
Kerala
9.83
Madhya Pradesh
5.40
Maharashtra
3.20
Orissa'"k'
15.01
Punjab”..
0.74
Rajasthan .
. 0.24
Tamil Nadu
10.54
\Ultar Pradesh
. 4.13
West .Bengal .
13-58
All India
6.95
0.13
0.59
6.13
4.12
12.53
0.93
0.90
5.95
2.22
0.49
10.76
10.45
0.22
9.91
1.47
4.82
■
1.82
0.00
1.10
5.04
0.89
6.23
0.00
3.87
6.06
0.48
0.19
5.06
1.44
0.75
0.01
2.29
Total
Cereals
Rice
13.62
13.68
16.45
11.75
14.15
11.62
10.73
15.22
11.48
15.98
11.69
15.75
12.20
14.79
15.06
14.06
12.30
12.60
8.70
2.10
0.70
5.00
9.10
6.10
2.80
15.50
1.10
0.20
10.00
3.90
13.60
7.16
January-December. 1992
Percentage Change in 1992 Over That in 1990-91
Total
Rice
Wheat
Wheat
Other
Other ’
Total
Cereals
Cereals
Cereals
Cereals
0.20
0.60
5.70
3.90
11.80
0.90
0.90
6.30
2.40
0.90
10.60
10.70
0.30
9.20
1.00
4.51
r-?'4.63
13.60
1.10
0.00
13.20
(—>3.58
15.00
Z
0.60
(-)3.16
5.10
n.itr
(->4.17
0.70 . 13.20
(-J0.2I
6.40. • 12.30
’ 4.65
0.00
10.00
(—)6.80
14.30
1.90
4.60
6.50 •’ 11.70
(—>3.48
0.70
17.10
3.07
0.30
12100 3.08
4.00
14.90
W0.25
1.30
11.60
<->4.43
0.60
13.70
(->1.56
0.10
14.70
0.13
1.86
13.50
1.49
0.51
0.07'
(-J2.61
(-)l.87
(->5.16
(-)0.26
0.00
2.30
1.57
2.57
<-)1.37
1.59
0.66
(->4.80
H3.12
(-J2.20
(-J5.29
. 0.00
(-)3.04
0.51
(->1.34
1.46
0.00
(-) 12.94
3.83
1.38
0.94
(—)6.73
(—>1.15
(-)l.Ol
0.60
(-J3.06
(-J0.15
(->3.51
(-)8".81
(—>5.53
<->6.71
5.85
(—)6.80
(->6.04
1.92
7.01
2.65
(-)5.40
(->4.92
(—)7.37
(—)2.39
(->3.77
Sbureef.GoI (1993b and 1994).
Table 9: Cereal Consumption (Kg) Per Month. Statewise Total Urban Population
DecileGroup
Rice
Andhra Pradesh
Assam..
Bihar..;-.;'
Gujarat
Haryana
Karnataka'
Kerala..: ;.
Madhya Pradesh
Maharashtra
JnsMuKL..
Punjab.,.-.
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
All India.... ....
10.30
1072
6.76
2.02
0.85
6.04
8.41
3.76
336
11.18
0.92
0.67
9.21
256
8.70
5.32
July. 1990-June. 1991
Wheat
Other
Cereals
0J92
1.36
6.00
5.84
9.07
1.55
1.19
7.12
4.77
2.45
8.06
9.35
0.81
8.47
3.08
4.77
0.48
0.00
0.09
1.69
0.19
2.81
0.00
0.66
1.66
0.30
0.08
2.01
0.12
0.11
0.00
0.75
Total
Cereals
January-December, 1992
Rice
Wheat Other Total
Cereals Cereals
11.70
12.08
12.85
9.55
10.11
10.40
9.60
11.54
9.79
13.93
9.06
12.03
10.14
11.14
11.78
10.84
10.26
10.19
7.08
2.45
0.97
5.92
8.70
3.94
3.29
10.60
0.78
0.50
8.96
2.44
8.61
5.26
0.89
1.34
6.48
5.05
8.52
1.81
1.02
7.33
4.52
2.52
8.02
10.20
0.84
8.82
2.69
4.78
0.42
0.00
0.10
1.38
0.41
2.71
0.00
0.19
1.61
0.24
0.05
0.92
0.18
0.16
0.00
0.64
11.57
11.53
13.66
8.88
9.90
J 0.44
9.73
11,46
9.42
13.26
8.85
11.62
9.98
11.42
11.30
10.68
Percentage Change in 1992 Over That in 1990-91
Total
Rice
Wheat Other
Cereals
Cereals
(-J0.34
(->4.39
. 2.49
4.50
1.19
(->1.15
3.02
1.56
(—)0.72
(->4.16
(-J1.55
(->1.41
(->2.47
(->1.08
(->0.76
(->0.55
(-)0.26
(-J0.17
3.74
<-)8.27
(—>5.44
2.50
(->1.77
1.82
(-J2.55
0.50
(-J0.44
7.07 .
0.30
3.14
(—)3.31
0.09
(->0.51
0.00
0.08
(-J3.25
2.18
(-X1.9&
0.00
(->4.07
(->0.51
(->0.43
(->0.33
(-J9.06
0.59
0.45
0.00
(-)l.Ol
(-)l.ll
(->4.55
6.30
(-)7.02
(—)2.08
0.38
1.35
(-)0.69
(-J3.78
(-)4;09
(—)2.32
(->3.41
(-)1.58
2.51
(->4.07
(-J1-48
SourceiGoI (1993b and 1994).
5?.2
Economic and Political Weekly
March 9. 1996
1991, July-December 1991 and January-1!?'
estimates show an increase in per capita poverty estimation. Ourestimatcs of average
December 1992.
. ....
cereal availability to 436.4 gram per day cereal price increases in rural and urban
2 These remarks are made by Shankar Acharyafi.'.
P ■'. which is more than thecstimated availability areas do not show such differences in rural
in a letter to N R Ranganathan,,Planning'?"'
of 411.8 grams for 19S7-S8. This seems to and urban cereal price increases.
Commission member-secretary [cited in fit
w
lend some support to the government’s . To overcome the price index and related
Bhandari 1996:68], ...
Kclaim that poverty has declined in 1993- poverty measurement problems, we examine
3 T-J’s state-level analysis is based on CPIAL-..^,,
adjusted APCTE and not on poverty estimates,^■
p
94 over 1987-88. But per capita cereal the changes in physical quantities of cereal
because of (i) the small size of the,samples
FT'
availability in 1993-94 was still below the consumption for all-India and major states
at the slate level; and (ii) their earlier, finding,^.
P
1990-91 level. This is an average picture separately by rural and urban sectors. Such
that a'change in all poverty measures is^y.
£?.,'• and reveals nothing about the distribution. an approach seems valid since much of
primarily a function of changes in real APCTE.
JJ
Public stocks increased by 3.9 million T-J’s reasoning is in terms of decline in
4 Whether the PDS, as it operates today, is really
Rv
tonnes. PDS offtake declined further by 2.3 cereals output and entitlement. We use the
■urban-biased is a moot question. See Dev.andrs.:.
Suryanarayana (1991) and Suryanarayana a?..:
2}
million tonnes in the calendar year 1994. same data source; therefore our findings too
(1994 and 1995b);
.
■
Offtake of rice and wheat was 8.88 and 5.86 are tentative. Unlike T-J, we find (hat cereal
5 The weighting diagram is from the average ......
S
million tonnes against the allocation of consumption has declined in both rural and
expenditure pattern of agricultural labour.nr.-r
12.41 and 9.56 million tonnes, respectively. urban all-India, thus contesting their
households obtained from the results of the-sei
Thiscouldbeduetodecreasingopenmarket- findings.
Second Al l-India Agricultural Labour Enquiry ex
conducted during 1956-57.
>
-lews
PDS price differentials and hence reduced
Changes in statewise sectoral average
6 T-J are aware of the chances for bias due to-»•'>incentives to avail oneself of the PDS. But cereal consumption show a complex picture.
such changes in the weighting diagram (seer4L
this should imply greater open market Contrary to T-J reasoning, rural coarse
note 2, p 2376). But they do not seem to**'
dependence of the poor and hence further cereal consumption has gone up in the pre
appreciate the extent of the likely bias and the
t^ketions in cereal entitlement. Therefore. dominantly growing and consuming states
distortions it may cause in the analysis.
•
7 The weighting diagram is from the family'®’
pOTerty musthave worsened after July 1991. of Gujarat, Karnataka and Maharashtra.
income and expenditure survey of workers’1-'
The percentage reduction in cereal
V
conducted by the Labour Bureau during'1’1,
consumption was more in the urban areas
1981-82.
7;-’' ;i’'
Conclusion
than in the rural in a majority of the states "82^01 (1993a) points out that inflation rates'"'
To sum up, the present paper examines and, particularly, in the highly urbanised
’based on CPIIW, CPIAL and consumer price'0’ ’
changes in poverty during the post-reform states of Gujarat. Maharashtra and WesP"
index for urban non-manual employees’;''
(CPIUNME) are not strictly comparable as’?"/
.
y
period and the empirical bases for some Bengal.
they differ with respect to their base year,//.*
The results presented above, if valid,
explanations. T-J find a definite increase
structure and coverage [GOI 1993a;75], "/?'/;
in rural poverty and virtually no change in suggest an immediate, adverse impact of
9 There are other methodological problems also1?/
urban poverty. For them, this was largely economic reforms on the poor by T-J’s
in using CPIAL and CPIIW for updating rural'?1
because of a pronounced increase in prices own reasoning. The macro evidence only
and urban poverty lines [sec Minhas et al 1987].'
10
The estimates of food marker participation^, '’
and a decline in foodgrain availability in corroborates the NSS results on worsening
rates provided in Tables 5 and 6 refer to the'/?."
the rural areas in 1991-92. They attribute poverty and there is no reason to disbelieve it.
year
1986-87. Further, they refer only to the',^j,
this to fall in agricultural (mainly coarse
Notes
"*
proportion of the population depending on the
cereals and pulses) output rather than to the
market and do not include the extent of their,,/?
ongoing economic reforms as critics have [The author thanks R Nagaraj for his comments
dependence. This limitation should be kept in.,,,,
on an earlier version of this paper without holding
done.
mind while interpreting the results. ...
Il There are many data constraints'and
WearguethatT-J’s finding of pronounced him responsible for any errors.]
methodological problems involved,,in
increase in rural poverty could be due to
I These findings are based on the NSS data on
estimating poverty measures, particularly the^.,,,.
consumer expenditure for July 1990-June
the outdated deflator (CPI AL) used in rural
t'*.'
Table 10: A Statewise Profile of Chances in Rural and Urban Cereal Consumption
___________ Urban Cereal Consumption
Decrease
Increase
Rural cereal consumption
Andhra Pradesh, Assam,
Gujarat, Haryana,
Madhya Pradesh,, Rajasthan,
Tamil Nadu, West Bengal
Maharashtra, Orissa, Punjab
Decrease
Increase
Bihar, Kerala,
Uttar Pradesh
Karnataka
Table 11: An Official Profile of the Food Economy
Year
Net AvailAvailability
of Cereals
Per Capita
Per day (grams)
1990-91
1991-92*
1992-93*
1993-94*
468.50
434.20
427.40
436.40
Public
Changes in
Foodgrain Allocation and Offtake
Distribution Govt Slocks
under PDS (million tonnes)
Wheat
(million tonnes) (million
Rice
tonnes)
Allocation Offtake Allocation Offtake
9.61
11.36
11.48
12.41
7.87
9.94
9.36
8.88
9.50
10.36
9.24
9.56
7.09
8.78
7.41
5.86
20.80
18.80
16.40
14.10
(—)4.4
(-)l.5
(+JI0.3
(+)3.9
• Provisional
Note: Total figures for public distribution relate to the calendar years; 1990-91 figures correspond
to the calendar year 1991 and so on..
Source: Gol (1995).
Economic and Political Weekly
March 9, 1996
severity measure. These constraints are due
to lack of (i) complete information on the in
degree of monetised consumption across
expenditure groups by sectors (particularly . .
rural) across states, (ii) data on farm and retail ,(.» prices used by the NSS Organisation in valuing
consumption from home-grown stock' and
market purchases, respectively, and (iii)
appropriate fractile group specific deflators to .»*.
account for the differential impact of inflation
(when relative prices have changed) across »:>•■
income groups. Without proper correction for
these factors, one could end up with misleading -W
inferences [see Suryanarayana 1995a].--K-n®*
12 A decline in cereal quantities consumed cannot "-tX’
be treated as indicating worsening poverty If
it isthe result ofchangingconsumption patterns"5"""
associated with income increases. Forinstance,'
over the past two decades there have been
perceptible changes in consumption patterns
in India, with the rural and urban households
preferring quality and variety to quantity in'
their consumption. As a result, total cereal
quantities consumed declined marginally, but "
largely due to progressive substitutioh’of ” *,
superior but costlier rice and wheat for coarse ’/
cereals necessitated by a decline in per capita (’
production of coarse cereals [see
Suryanarayana 1995a]. In the present context, ,,. '
the spread of consumer culture along with
Poverty Alleviation and Housing Problem
36
6, 1975, p. e.
4.
Handbook of International Trade and Development Statistics
supplement, 1973.
5.
Cintron and Levine, “Quienes son los probres en Puerto Rico?”
Problems de Desigualdad Social en Puerto Rico, International,
1972.
6.
Oscar Omati, “What is Poverty, in Helen Ginsburg, ed., Poverty
Economics and Society (New York: Little, Brown and Co., 1972).
7.
See El Hambre, Problema Universal or La Geopolitica del Hambre.
Editoriales Pleyade Salar/Hachette, respectively.
3
Poverty and Social Security
The Problem of Poverty
Poverty is perhaps the most fundamental social problem because
the need to survive and therefore have the means to survive is
universal. Absolute poverty means the condition in which it is not
possible to obtain the basic necessities of life. In Britain today mass
poverty of this kind does not exist although it is all too prevalent in
many parts of the world. But relative poverty remains a major problem
and there is increasing evidence that for some individuals and minority
groups absolute poverty is still a real threat if not an actual torment.
Relative poverty means basically that some people are poorer than
others. This is almost bound to exist unless the whole basis of society
and indeed of human nature were to be radically altered, and it is not
necessarily a problem. The problem arises when the difference between
the richest and the poorest becomes too great. What is meant by ‘too
great; in this context is very much open to argument, but a simple
explanation would be that the gap between rich and poor is too great
when the poor, while not actually starving or homeless, are
nevertheless unable to enjoy many of the goods and services which
others take for granted. This, then, depends on what is regarded as
the normal standard of living for a particular society. If most people
not only have enough to eat and somewhere to live but also have
money for entertainments and travel, luxury goods and drinks and
fashionable clothing then the minority who are merely subsisting are
justly considered to be, in relative terms, in poverty. And poverty
involves much more than lack of money, although that is still a
fundamental aspect of it. People who live in slums and have to make
use of inadequate, ill-equipped schools and overcrowded, obsolete
hospitals are poor even if they have money in their pockets. People
38
Poverty Alleviation and Housing Problem
whose physical, emotional and intellectual growth has been stunted
by poor conditions have been deprived of opportunities for personal
fulfilment which no subsequent material comfort can make amends
for.
It is obvious that it is very hard to obtain a satisfactory definition
of poverty. The concept of poverty is widely debated and is regarded
as a problem that society ought to tackle, but is hard to obtain a
consensus of opinion on what actually constitutes poverty in our
present day society. Consequently it is difficult to find out the nature
and extent of poverty although such findings should be the basis of
an effective social policy to deal with the problem.
In attempting to define poverty various standards can be used.
One of the simplest to grasp, although not necessarily simple to
work out in detail, is the physiological standard. Roughly this means
that a person is considered to be in poverty if he lacks the resources
to obtain enough food, clothing, warmth and shelter to maintain a
tolerable standard of physical health and efficiency. This standard is
a reasonable scientific one in that such thing as nutritional
requirements can be worked out precisely and data can be collected
on the cost and availability of the necessary items, in order to produce
figures of what income is required to maintain a person in physical
efficiency. A physiological definition of poverty is one which permits
relatively easy translation into cash terms. This makes it possible to
carry out the measurement of poverty on a large scale. A poverty line
is drawn, being the minimal amount of money needed to keep a
person out of poverty, and the numbers of people who fall below this
line can then be counted. This technique of measuring poverty was
first used effectively in Britain around the turn of the century in the
pioneering surveys conducted by Booth and Rowntree. At that time
the information they obtained indicated that, by their rather stringent
standards, over one quarter of the population was living in poverty.
Definitions of poverty in physiological terms can be relatively
clear cut and enable precise quantitative assessment of the problem
to be made, but they are hardly adequate for a society which has an
average standard of living that is well above mere subsistence level.
In any relatively affluent society it is necessary to define poverty by a
Poverty and Social Security
39
social standard, that is, to define what society considers is or is not a
reasonable minimum standard of living. This standard is reflected in
what society is prepared to provide to keep people in a minimal state
of health and decency. It will depend on a variety of factors such as
the wealth of the society, the average standard of living, the numbers
in need, the sense of community and prevailing attitudes and
ideologies. It is essentially less precise than a basic physical standard
but rather more relevant in comparatively wealthy societies. To arrive
at a social definition of poverty it is necessary to decide what aspects
of a complex pattern of consumption should be regarded as essential.
For example, is it essential to have food that is varied and palatble as
well as nurittionally adequate? Is it necessary to have clothing that is
clean, which means having spare clothing and money for laundry and
dry cleaning facilities, or is it enough just to be warmly clothed? Is it
necessary to watch television, catch a bus rather than walk, buy
newspapers, use cosmetics, stand a round of drinks? At what point
does society maintain that a person who lacks resources for these and
other goods and services is in poverty? Clearly it is hard to give
precise answer to such questions and equally clearly they must be
asked. We cannot tackle the problem of poverty until we define it
and we must try to do so by reference to the standards of living
prevailing in society, by deciding what mode of living is or is not
acceptable to society.
A further yardstick of poverty is a subjective one that is, those
people are counted poor who feel poor. This personal standard will,
of course, vary enormously between individuals according to their
expectation and accustomed living patterns. It is not, therefore, much
use in calculating a poverty line, but nevertheless the concept of felt
poverty must not be ignored. Recent research has tended to concentrate
on whole groups of people whose life styles are substantially poorer
than those of the rest of society: the old and single-parent families are
examples of groups with a high risk of poverty. Yet another approach
is to look at geographical areas in which the concentration of poor
conditions adds up to a definition ofpoverty or urban deprivation.
Other ways of defining poverty are possible: the above examples
are intended primarily to indicate something of the complexity of the
problem. The importance of acceptable definitions is that they allow
40
Poverty Alleviation and Housing Problem
poverty to be measured and that is obviously a first step to
understanding and dealing with the problem. The most common way
of measuring poverty today is to use an income based ‘poverty line’
and ascertain the numbers below it. The level of income taken which
is put on a sliding scale according to age, numbers of dependants,
etc., is usually enough to raise people above the bare physical
subsistence standard with some further allowance for what is vaguely
deemed a socially acceptable standard of living. But very large
variables in the cost of basic necessities, particularly housing, makes
simple per capita income surveys of limited use in obtaining an
accurate measure of the numbers in poverty. At the moment, definition
and exact measurement of poverty are rarely attempted partly because
of the practical difficulties involved and partly because of a widespread
belief that the first is self-evident and the second would lead to few
findings of any significance. But this is really to shirk a very important
problem.
Another aspect of the poverty issue which is of tremendous
importance is understanding something of the causes. This is perhaps
a more feasible approach than that of obtaining precise measurements
of extent, and investigations into why people are poor have yielded
some pretty clear results. The first major cause of poverty is
insufficient earnings either because wage levels are too low, or because
families are too large in relation to earnings. Low wages can be the
consequence of a general exploitation of labour or low productivity
etc., or in the case of a particular individual they can be the
consequence of a lack of skill and training which cause a person to
take low-paid employment. The second major cause of poverty is loss
or interruption of income due to temporary or permanent inability to
work for such reason as sickness, unemployment, disablement,
maternity or retirement. At any given time the pattern of poverty
causation is likely to vary according to the prevailing social and
economic condition. When the first surveys were conducted the major
causes of poverty were found to be low wages and large families.
Surveys in the 1930s indicated that unemployment was a major cause
of poverty. Recent research has shown that in the 1960s and 1970s
the main causes of poverty are old age, chronic sickness, large families
and single-parent families, with low pay still and important factor of
Poverty and Social Security
41
poverty causation.
One concept which is useful in understanding poverty is that of
the poverty cycle. That is, that people tend to experience poverty in
childhood, rise above it when they grow up and starting eamrng, fall
back into poverty when they marry and start a family, rise above it
again when the family grows up and contributes to the household
expenses and sink finally into poverty again when the family leaves
and they enter retirement and old age. This concept is important in
showing where help must be concentrated if poverty is to be tackled.
It also indicates that many more people experience poverty than the
proportion who are found to be poor at the actual time of a survey,
and that they tend to experience it at particularly vulnerable points of
their lives. A further important consideration about poverty is the
distinction made between primary and secondary poverty. This was
first drawn by Rowntree in his original survey, already mentioned,
and at that time it could be seen quite clearly: primary poverty was a
condition in which a person lacked the resources to maintain himself
in physical efficiency, which was the stringent physiological definition
of poverty being used. Secondary poverty existed if a person had the
resources but used part of them on goods or services, wasteful or
useful, which were not strictly contributing to the ‘maintenance of
physical efficiency’, and thereby fell into poverty by that definition.
Today, when more generous standards of poverty tend to be used, the
distinction is less clear but is still valid. Even though a modem
‘poverty line’ would be higher than bare subsistence it would not be
likely to include an allowance for such things as cigarettes or dry
cleaning charges. So a person who used up part of a very low income
or allowance on such things would have to go short on food or fuel or
fail to pay the rent, and this would constitute a form of secondary
poverty. Indeed some people just manage their finances badly and
spend money unwisely and therefore have to go short of essential
even though they appear to have adequate resources. So the idea of
secondary poverty is still relevant although, because it involves a
good many value judgements about the way people spend their money
and order their lives, it must be used with considerable caution.
Most a tempts to find a working definition of poverty tend to be
42
Poverty Alleviation and Housing Problem
focussed on the cash aspect of being poor. That is they involve
measuring the cash resources an individual or family commands and
relating the amounts obtained to a poverty line drawn in monetary
terms. This is understandable because, as we have already noted,
money is crucial in our society and this approach does facilitate the
measurement of poverty. But increasing attention is being directed to
other aspects of deprivation and attempts are being made to quantify
housing standards arid the level of amenities enjoyed by different
groups of people. It is increasingly accepted that poverty of
environment and education are strongly linked to poverty of monetary
resources. A poor background still tends to mean poor prospects for
most children a fact now acknowledged by current concern over the
‘cycle of deprivation’.
Further aspects of deprivation which are now considered under
the heading of poverty include such things as the relative lack of
political power enjoyed by some groups of society, and the poverty
of social relationships suffered by some people. But at the same time
as the concept of poverty is being steadily broadened out from its
earlier pre-occupation with cash, the study of this central element of
poverty has itself become more penetrating. Measurement of income
now tries to take account of all the ways an individual or family, over
time, ensures command over the use of resources. This means that
income must be seen to comprise not only current cash receipts from
wages, salaries, dividends, interest, pensions, benefits and so forth,
but also capital assets, occupational benefits and benefits in kind
from social services, or from relatives and friends. Only by such a
comprehensive approach to income can we begin to determine how
far individuals or groups are in any meaningful sanse richer or poorer
than one another.
It can be seen that poverty remains difficult to define or measure
but it is being discussed with increasing sophistication by social
scientists. Leaving aside the problems of conceptualization for a
moment it is worth remembering that for some people poverty is an
experience that is too real to require any definition. Let us consider,
very briefly and simply, the effects poverty has on those who
experience it. Obviously a condition of absolute poverty can lead to
Poverty and Social Security
43
starvation and death, but what affect does living around the present
poverty line have on the families and individuals who are dwelling in
this situation? Clearly if a person has just enough to live on and no
more he must be very careful in managing his income. The housewife
must buy cheaply and make do and mend with such things as clothes
and resist the temptation, or the demands of children, to spend money
on luxuries or toys. The poor live in constant anxiety, worried that
their precarious budget won’t work out, that they will be overtaken
by debt or eviction. They live in constant humiliation as they observe
the cheerful affluence of those around them and have to get by with
second-hand goods, with restricted opportunities for a show of
generosity or hospitality, with the clamour of children who don’t
understand why they can’t have the things which their friends enjoy.
Frequently the poor suffer from malnutrition and even hunger, their
actual life expectancy will be lower than average, their living
conditions are likely to be squalid and overcrowded. The response to
these ills is often deep despair, an erosion of self-respect, a deterioration
of family relationships. In short, poverty means a good deal of physical
and mental suffering for those who experience it, and it involves the
risk of permanent damage to health and well-being and to a person’s
chances of personal development and happiness.
The effect of poverty on the community as a whole are no less
striking and damaging than they are on individuals. Poverty leads to
other social problems such as sickness, not necessarily as a direct
cause but as an exacerbating factor. For example, the poor are unable
to give their children the attention they require and the care they
need and so the problems of the deprived and delinquent child are
closely associated with poverty. Poverty leads to slums which are an
eyesore and a health hazard. It breeds unrest and discontent and even
violence where it is co-existent with great affluence and is a growing
symptom of grave social injustice. Poverty means a waste of valuable
human resources as it stunts the full physical, intellectual and emotional
growth of those who suffer it, and that can only be a tragic loss for
the whole society.
Social Security: Different Approaches
The social policy needed to deal with problems as complex as
44
Poverty Alleviation and Housing Problem
poverty cover a wide front. It must aim to raise the level of real
wages, improve general standards of health and education, maintain
full employment raise productivity. It must also cope with the
immediate financial needs of the individual and attempt to obtain a
just distribution of such things as educational opportunity. That part
of the policy which is concerned directly with maintaining income,
primarily when people are unable to work, and thereby securing
them against falling into poverty in the narrow but important sense of
being short of money, is known as the social security system. It is
with this aspect of the total response to the problem of poverty that
the remainder of the chapter will primarily be involved. For tire
social security system, in addition to having a lengthy history, is
undoubtedly one of the major social services in this country and it
deserves considerable critical attention.
The most abvious way for society to deal with straightforward
financial difficulties is to accept responsiblity for meeting the need of
any of its members who fall below a certain defined level. If a
substantial section of the community lives at a bare subsistence level
then the assistance offered by the community must itself be at a very
low level and offered to the totally destitute. This is because it is
generally accept that state assistance cannot be so generous, relative
to the prevailing living standards, that people are attracted to it from
paid work. This is often referred to as the principle of ‘less eligibility’
because it was enunciated clearly in this country with the passing of
the Poor Law Amendment Act of 1834 in the statement that the
condition of recipient of relief ‘shall not be made really or apparenly
so eligible as the situation of the independent labourer of the lowest
class.*’ It is still considered basically unjest that a man should obtain
more money by state assistance than by working for it. Fortunately
once the community lives at a reasonably high standard of living then
help for the poor can be offered at level beneath the general standard
but somewhat above bare subsistence. So less eligibility in the
nineteenth century meant the workhouse with its punitive regime and
social stigma because it was impossible otherwise to offer relief
below the lowest prevailing levels. Today, however, it simply means
a definitely meagre existence, which contrasts sharply with the
Report of the 1832 Commission on the Poor Law.
Poverty and Social Security
45
standards of the rest of a fairly affluent consumer society and probaly
with the previous situation of the people whom misfortune forces on
to assistance. This' change reflects the changing interpretation of
poverty from the notion of absolute destitution to that of substantial
relative deprivation.
State assistance to relieve poverty has always tended to carry
some stigma, as it is only available on test of need and the desire to
maintain the principle of less eligiblity means that it tends to acquire
a reputation for the systematic degradation of its recipients. Moreover
it is usally seen as ‘charity’ in the sense that the better off are taxed
to help the poor. It can be the sole source of income for some people
or it can be provided to bridge the gap between a person’s resources
and his needs. Assistance can be provided as cash, by regular
allowances or occasional lump sums for use as the recepients
determine; or as grants for specific purposes such as clothing; or in
kind, as free school meals, for example; or as specific rebates or
allowances, as in the rate rebate scheme. But all forms of assistance
are selective, that is, they operate through some kind of means-test.
An alternative approach to income maintenance is that of state
or national insurance. This is based on mutual aid, rather than ‘charity’
and has been generally regarded as a more acceptable basis for income
maintenance than selective assistance as it aims to prevent people
becoming destitute rather than to assist them once they are. The
insurance idea, put quite simply, is that everybody who is working
pays a small amount each week into a fund and then they can claim a
weekly benefit in the event of their being unable to work because of
sickness or unemployment or any other contingency against which
the scheme ensures them. Eventually they can claim a retirement
pension for which they will have, in a sense, saved during their
working life. In an insurance scheme the contributors are protected
against poverty but also against the humiliation of a means-test as
their benefit is their due entitlement regardless of any resourses they
may have. Insurance means a pooling of risks and a horizontal
redistribution of income from those who are well to those who are
sick and from those who are working to those who are unemployed
as compared to the vertical, rich to poor, redistribution of assistance
46
Poverty Alleviation and Housing Problem
methods of poverty relief. It also involves a redistribution of income
over the individual’s life, saving in good times to help out in hard
times. Poverty caused by loss or interruption of normal earnings can
be prevented by method of social security. Investigations into the
causes of poverty have shown that loss of income because on inability
to work is a major problem. If the main risks of loss of income are
determined then the population can be insured against them. These
risks are usually, umemployment, sickness, disability and, for women,
maternity and widowhood, Retirement is not in the same sense a risk,
but it involves a loss of income and can be insured for likewise. If a
basic minimum income is assured when a person suffers any of the
contingencies which cause loss or interruption of earnings, there should
not be any need to have recourse to assistance. Clearly this approach
does not help those, such as the congenitally disabled, who never
have an income to lose. Nor does it help those who deviate from
average, anticipated life styles, such as the deserted wife. It is
essentially an approach geared to the average needs of the normal
working population as society interprets these at any given time.
A further method of tackling poverty and maintaining income is
to pay, from general taxation, a universal benefit in respect of any of
the known common cause of poverty, such as old age. In other words
to pay a pension not just to those old people who lack resources as in
the case of assistance schemes, nor just to those who have paid
contribution to entitle themselves to it, but to everyone over a certain
age. This method, sometimes referred to as a demogrant, avoids the
stigma and disincentive of a means test and the complexity and
restrictions of any insurance scheme but it is obviously a costly
method. It can be applied to any category of persons such as the
disabled or dependent children.
The British Social Security System
The problem of income maintenance can be takled by any one
or any combination of the strategies briefly outlined above: assistance
to those who prove their need; insurance against loss of income from
a variety of causes; and universal payments to certain categories of
persons likely to be in financial need. In present day Britain the
social security system makes use of all three approaches and a variety
Poverty and Social Security
47
of methods. It l as a National Insurance Scheme to cover the major
risks of loss of interruption of earnings, including retirement; a
universal Family Allowance Scheme to direct extra resources to those
responsible for the maintenance of children, and a major assistance
scheme, known as Supplementary Benefits, for those who are not
covered adequately, or at all, by the insurance scheme. These schemes
were set up more or less in their present form shortly after the Second
World War. They followed recommendations contained in the
Beveridge Report, Social Insurance and Allied Services, which was
published in 1942, although their origin lie much further back in our
social history. Basically they indicated that for most causes of
interrupted earnings the working population would earn its own cover
through insurance. For those outside of insurance a safety net of
assistance would keep people at a basic subsistence level. There was
some redistribution towards dependent children, but not a clear family
policy, just a relatively modest allowance towards the costs of second
and subsequent children.
Since these schemes were established there have been various
additions and modifications. After numerous developments in the
insurance scheme the Social Security Act of 1973 changed the system
fairly radically but still further changes are about to be implemented.
An attendance allowance for severely disabled people has been added
and a variety of selective assistance measures have been introduced,
most notably the Family Income Supplement and rent and rate rebates
and allowances. Despite these changes there is still much anxiety
about the present social security system and much discussion of
alternatives and improvements, such as tax credits or payments to
single-parent families. The next sections will describe the present
system then look briefly at some of its problems and some proposals
for change in the complex field.
Central Administration: The main income maintenance schemes
are administered by the Department of Health and Social Security
under the Secretary of State for Social Services. The DHSS was
established in 1968, bringing together the previously separate
Ministries of Health and Social Security. The Supplementary Benefit
Scheme is administered by the DHSS but has a separate, appointed
48
Poverty Alleviation and Housing Problem
body, the Supplementary Benefits Commission responsible for
supplementary benefits policy. The staff, offices and administration
of insurance and assistance are combined. The DHSS is also
responsible for War Pensions. It has overall concern for all levels of
administration and has a network of local and regional offices which
try to ensure that this highly individual social service does not become
too remote from the needs it exists to serve.
National Insurance: The central feature of the present social
security system is the national insurance scheme. This was established
in 1946 but has been substantially altered and developed over the
years. The 1973 Social Security Act, as amended in 1974, replaced
all previous legislation and established an earnings related basic
insurance scheme which became operative in April 1975.
The idea of national insurance is to prevent people from falling
into poverty when they are unable to earn. The contributions
employees pay afford cover against sickness, including chronic
invalidity, unemployment, disablement through accident or disease
arising from work, and retirement. The scheme assumes that most
men will marry and support a family, so their contributions cover for
benefits for dependent wives and children and cover against their
wives’ risk of widowhood. Cover also includes orphans’ allowances
and lump-sum payments for maternity and on death. Married women
have traditionally been treated as dependent on their husbands but
working women who pay a full rate of insurance have their own
rights to benefit including a maternity benefit when they interrupt
employment to have a child. The scheme is financed partly by regular
weekly contributions paid by employees and employers, and partly
by the State through taxation. Contributions include a token payment
towards the cost of the national health service and payment to the
Redundancy Fund. Since national insurance is highly complicated
and it has an alarming number of rules, classifications, categories
and conditions, only a bare outline of its main provisions can be
given here.
Contributions are in four classes related to four main categories
of insured persons. Class 1 contributions are paid by the average
worker who is in full-time contracted employment. This contribution
Poverty and Social Security
49
is earnings related and consists of a percentage of weekly earnings
between £13 and £95. The primary contribution, paid by the employed
earner, is 5 ’/< per cent of relevant earnings. The secondary contribution,
paid by the employer is 8 ’/« per cent of relevant earnings. Class 2
contributions are flat rate payable by self-employed earners. These
are currently £2 41 per week for a man and £2.20 for a women*.
Class 3 contributions are payable by the non-employed and are £2.10
per week. Class 4 contributions are payable in respect of profits or
gains of a trade or profession and are 8 per cent between £1600 and
£4900 per annum.
Contributions entitle people to a wide range of benefits but
these mostly depend on contribution record and on class of contribution
paid. Class 1 contributors are eligible for all benefits. Short-term
benefits are unemployment and sickness benefit and maternity
allowance. These have provision for earnings related supplements,
where relevant, for up to six months and all benefits have increases
payable in respect of adult of child dependents. Short-term benefits
are currently payable at the rate of £12.90 per week for a single
person (£9.20 for a married woman) plus £8.00 for an adult dependant,
£4.05 for a first child and £2.55 for second or subsequent children.
Unemployment and sickness benefit is not payable for the first three
days off work. Unemployment benefit is payable for 312 days after
which entitlement ceases and only begins again after the insured
persons has been employed for at least thirteen weeks. Sickness benefit
is payable for up to 168 days after which a person is entitled to
invalidity benefit. Maternity allowance is payable to fully insured
working women for eighteen weeks begining the 11th week before
the expected week of confinement. Maternity grant is a single payment,
on the insurance of a woman or her husband, payable on the birth of
a child. It is currently £25.
Retirement pensions, widows’ benefits and invalidity benefits
are paid at a higher rate of £15.30 per week for a single person or
£24.50 for a married couple with £7.45 payable for the first child and
£5.95 a week for second and subsequent children. Invalidity allowances
*
Contribution and benefit rates quoted here are as from November 1976.
Up-to-date rates can be checked at local offices of the DHSS.
50
Poverty Alleviation and Housing Problem
are paid in addition to benefits, depending on the age at onset of
disability and these are continued in retirement. The rates vary from
£3.20 where disability began before age thirty-five, to £1.00.
Retirement pensions are payable to men over sixty-five and women
over sixty. The weekly rate can be increased by deferring retirement.
Those who retire but do part-time work will now be able to earn up
to £35.00 per week before losing entitlement to their full pension.
Those over the age of eighty are entitled to a small age addition to
pension. All old people are now entitled to pensions, even if they
were not insurance contributors, but the minority who were never
covered have a smaller pension payable. Death grant is a fixed sum
paid on the death of an insured person or close relative of an insured
person. It is variable according to age and is currently £30 for an
adult. Widows’ benefits are payable to all widows for up to twentysix weeks after the death of a husband and thereafter as widowed
mothers’ allowance, if the widow has dependent children, or widows’
pension if she is older. Widows’ benefits are not payable if the
widow remarries or is she is cohabiting with a man as his wife.
Guardian’s allowances are payable in respect of orphaned children of
insured persons. Attendance allowances are payable with no
contribution conditions to a person who is so severely disabled,
physically or mentally, that he requires frequent attention or
supervision either by day or through the night. Claims for this
allowance are decided by the Attendance Allowance Board. Current
rates are £8.15 per week or £12.20 per week for more serious disability
involving both day and night attendance.
Under the Industrial Injuries Scheme, Class 1 contributors can
claim when they are injured at work or disabled by a prescribed
industrial disease. Injury benefit is not dependent on the number of
contributions paid and it applies even to those not paying eamingsrelated contributions. Injury benefit is payable at the rate of £15.65
a week for up to twenty-six weeks. Disablement benefit is a pension
or gratuity for any disablement which remains when injury benefit
stops. This varies according to the degree of disability, being £25.00
a week for a 100 per cent disablement, and it can be supplemented
by extra benefits such as constant attendance allowance, or special
hardship allowance, where necessary.
Poverty and Social Security
51
These are the main national insurance provisions but the
exact detail of entitlement for different benefits and allowances is
very complex. The scale of insurance is now considerable. Just over
ten million people were national insurance beneficiaries in 1973.
Over eight million of these were retirement pensioners or widows
over sixty. The next single largest category was persons receiving
sickness and invalidity benefit, which on average amounted to over a
million. Taking a count on a single day in 1973, 197,000 persons
were in receipt of unemployment benefit. The other categories such
as widowed mothers and those in receipt of maternity allowances
made up the total. The full cost of the national insurance scheme is
now quite considerable. In 1973 it amounted to over £4000 million
and the levels of benfit have substantially increased since then.
Supplementary Benefits: The Beveridge Plan for national
insurance was a bold one particularly in its emphasis on universality,
e. all persons contributing regardless of their income level, and one
i.
comprehensive risl coverge. It was overtaken by economic and social
changes and to some extent it failed right from the start to provide
the real social security it promised. Nevertheless it remains the basis
of our present system. Yet however effective an insurance scheme
is, it can never hope to cover everyone in society but only those
who are able to be consistent contributors. Those who are too old
when a scheme is introduced, those who outrun their entitlement to
benefit or, like deserted wives, lose it, and those who cannot work
must .all look for help elsewhere. Some scheme of financial assistance
is always necessary as a safety net to catch the variety of cases who
cannot for an equal variety of reasons rely on insurance. In 1948 the
National Assistance Act provided this safety net with the setting up
of the National Assistance Board. This provided not only a safety
net for those outside of insurance butjncreasingly an additional support
to national insurance benficiaries when they had no resources other
than their pensions and allowances. For this reason the NAB changed
its name in 1966 to the Supplementary Benfits Commission and
responsibility for insurance and assistance was merged into social
security.
The Supplementary Benefits Commission pays benefits as of
right and without any contributions to people whose incomes, whether
52
Poverty Alleviation and Housing Problem
from other benefits or private resources, are below a level of
requirements laid down by Parliament. Anyone over sixteen who is
not in full-time work is entitled to benefit if their resources are less
than their requirements. In computing resources certain amounts of
income from capital or disability pensions, for example, and up to £4
a week of earnings, can be disregarded. In computing requirements
the scale rate is taken for a single householder or a couple, plus
amounts for dependent children which vary according to age, plus
the actual cost of rent and any discretionary payments towards special
expenses such as diets. There are two scale rates, for short-term
claimants and long-term claimants, the latter including all pensioners.
The current rates are £12.70 for a single person and £20.65 for a
couple on short-term benefit and £15.70 and £24.85 for long-term
claimants. Payments for dependent children vary according to age
ranging from £3.60 for a child under five to £6.50 for one between
thirteen and fifteen years old. Payment of supplementary pensions
and allowances is normally through order books at the post office
and a combined retirement pension and supplementary benefit pension
book can be obtained. For the unemployed payment is made at an
employment exchange. People on supplementary benefit are entitled
to exemption from certain other charges, those for prescriptions and
schools meals, for example.
Supplementary benfits were paid to a total of 2675000 people
in 1973. In addition to the regular weekly payments the SBC makes
numerious single payments for exceptional needs. The majority of
claimants, over 1.8 million, were old people most of whom were also
retirement pensioners. Roughly 250000 claimants were unemployed
and of these 10000 had their allowances reduced under the, now
abandoned, wage stop. The sick and disabled accounted for 280000
claimants and women with dependent children 228000 claimants.
The total cost of supplementary benefits in 1973 was £730 millions.
Other social security measures: Family allowances were first
introduced in 1945. They are payable to all families with children in
respect of the second or subsequent child under school leaving age or
in full-time education or training under the age of nineteen. The
current weekly rate is £1.50 per child. Family allowances are a
Poverty and Social Security
53
universal benefit payable to any family regardless of income level
and financed out of general taxation. Their aim is to reduce the
poverty in families which may be caused by the impossibility of
stretching one wage to cover a variable number of dependants. They
are of most importance to families of low-wage earners but have
been paid universally as a general recognition of the importance of
family responsibility at all income levels. A similar recognition is
implicit in the tax system which makes allowances for dependent
children but includes the first child who is still left out of the family
allowance schem s (although plans have been announced to include
all first children from 1977). Family allowance were paid to 4365000
families in 1973 at a cost of £359 million. This was only 6.3 per cent
of the total social security budget so it can be seen that family
allowances are afforded a low priority at present as a means of
combating family poverty.
Partly as a result of the low rates of universal family allowances
several families have fallen into poverty, i.e. below official
supplementary benefit levels, while being supported by a wage earner.
Since supplementary benefit cannnot be paid to those in full-time
work while an extension and substantial increase of family allowances
was not politically acceptable, a further selective family benefit was
introduced in 1971. The Family Income Supplement is payable to
families whose normal gross weekly income is less than amounts
prescribed by Partiament. The prescribed amounts are £39.00 per
week for a family with one child plus £4.50 per week for each
additional child. Anyone, including a single person, with at least one
dependent child can claim if he or she is in full-time work. The
amount payable is half the difference between the family’s income
and the prescribed income up to a maximum of £8.50 a week for
families with one child and 50 p. per week for each additional child.
Those who are entitled to FIS are automatically entitled to free
schools meals, prescriptions, etc. Those who wish to claim must
furnish evidence of their earnings and, if eligible, they receive books
of weekly orders. In 1973, 106000 families received the supplement
which cost £15 million. Take-up of FIS remains low despite extensive
advertising. It is estimated that only 50 per cent of families who are
eligible for some supplement actually claim it, partly because of the
54
Poverty Alleviation and Housing Problem
claims procedure and partly because the amounts involved are often
small.
A further task undertaken by the Department of Health and
Social Security is the administration of war pensions. These are
payable to persons disabled as a result of war service, including
civilian casualties of the 1939-45 war, or service in the Armed
Forces since 1945, and to the widows, parents and other dependants
of those who have died as a result of such service. In addition to the
cash pensions and allowances, the Ministry also provides a welfare
service for war pensioners.
The main social security provison is through the DHSS, as
outlined above, but mention must be made of the numerous benefits
which are now available through the local authorities. The most
important of these are rent and rate rebates and allowances. Rate
rebates are available where an applicant, either owner-occupier or
tenant, has an income of less than a certain amount. Tenants of
council housing can claim rent rebates which are deducted at source
and tenants of private lettings can apply for a rent allowance calculated
according to means and family responsibility. Local authorites can
also provide certain education benefits on test of need, such as free
school meals and clothigs allowances. People on low incomes can
also obtain free legal advice and assistance and, if necessary, legal
aid for court proceedings.
Difficulties and Dilemmas in Social Security
Social security is highly complicated and costly. Its primary
aims is to earadicate poverty but, inevitable, in trying to establish
some degree of social justice by redistribution of income it raises
more difficult issues. The present system, as the previous sections
have indicated, is widely criticized both in terms of its primary aim
and of its wider implications. The criticisms are founded on facts as
well as on convictions. The substance of the criticisms are first, that
the present system has failed to keep some people out of primary
poverty, and second, that where people are kept above the official
poverty line they are kept at a mere subsistence level which is itself
regarded in an affluent society as constituting poverty. The first
Poverty and Social Security
55
criticism is that the basic aim of a social security system is not being
realized. The second is more concerned with issues of social justice
than of primary poverty.
Allegations that some people were living in primary poverty,
that is their resources were less than was allowed by the official
poverty line (the standard-rate) allowance plus actual rent provided
by the Supplementary Benefits Commission) were met with surprise
by a nation accustomed to believing that want had been abolished.
Research in 1965, however, revealed that some people, amongst old
people, the chronic sick and members of large families, were actually
living below the official basic minimum.* The independent research
findings were substantiated by two official enquiries.xx That on
retirement pensioners revealed that of the six and a half million people
currently claiming retirement pensions about 800000 were
provisionally entitled to assistance but were not receiving it. Of these
it was estimated that about 300000 would have absolutely no resources
other than their retirement pensions and would therefore be living in
extreme poverty. This survey did not calculate the numbers of people
who were neither on assistance nor claiming'pensions who might be
in poverty, but it was likely that a similar number of non-pensioners
might be in need also. These facts were very disturbing, confirming
as they did the suspicions of many social workers and researchers
who had noted individual examples of extreme hardship among the
old. Action was taken in 1966 by the creation of a Ministry of Social
Security and the renaming of assistance ‘supplementary benefits’.
These changes were accompanied by a determined campaign to
advertise a person’s entitlement to a reasonable living standard and
encourage old people to claim their rights. These moves were
implemented because the official survey had revealed that the two
main reasons why people failed to claim assistance were ignorance
* See Briar Abel-smith and Peter Townsend, ‘The Poor and the Poorest’.
Occasional Papers in Social Administration No. 17, 1965.
xx See Financial and other Circumstances ofRetiremet Pensioners, Ministry
of pensions and National Insurance (1966), and Circumstances of Families
Ministry of Social Security (1967), for further details.
56
Poverty Alleviation and Housing Problem
of their entitlement and pride which rejected assistance as charity.
The second survey was on families and it also produced
disturbing results: that nearly half a million families, containing up to
about one and a quarter million children, had resources amounting to
less than the current supplementary benefit rates would have afforded
Families were living below the official poverty line because the
fathers were in full-time, work and could not be assisted, or because
the father was on assistance but subject to the wage stop which
reduced his allowance below his normal earnings. Others at risk
included fatherless families and those on insurance benefits not claming
assistance. The basic reason why these families, whether in work or
on assistance, were in poverty was the inadequacy of family
allowances. These had fallen in value, relatively, and they failed to
meet the additional costs of keepting a child. The answer to family
poverty seemed at first glance simple: considerable increases in family
allowances were needed. But as allowances are paid to all families
the necessary increases would have proved very costly. As the country
was trying to keep down the rising level of public expenditure this
solution was therefore not acceptable and a variety of selective
measures was introduced instead.
Since this ‘rediscovery’ of poverty in the 1960s, anxiety has
increased not abated, because despite many additions and modifications
to the social security system there is still evidence of disturbing
levels of poverty in Britain. On the basis of the Family Expenditure
Survey, at December 1972 it was estimated that there were still
980000 people over pensionable age not claiming a supplementary
pension whose incomes wre below the supplementary benefit level.
There were also 800000 people under pensionable age living below
supplementary benefit levels. Current estimates are of roughly two
million people living below subsistence level. Meanwhile there is still
concern that the level of subsistence itself is low in relation to average
living standards. Although benefit rates have risen substantially they
remain highly vulnerable to inflation which has been increasing
alarmingly. Moreover the complexity of the social security system is
such that many people probably fail to get their full welfare rights
from it and in order to obtain even a part of the help available, a
humiliating and bewildering succession of means tests must be
Poverty and Social Security
57
undergone. There can certainly be no room for complancency,
therefore, in contemplating the present income maintenance scene.
The two major problems remain those of family poverty and the
financing of retirement, although others, such as inadequate provision
for the disabled, continue to cause concern. The discovery of family
poverty led to the foundation of the Child Poverty Action Group in
1965. CPAG has now acted as a pressure group in this field for ten
years exposing the plight of families, encouraging a welfare rights
approach and putting forward proposals to improve the situation.
Basically the relatively low level of family allowances and their non
coverage of the first child remains at the heart of the problem. CPAG
has long campaigned for an effective family policy based on family
allowances and this approach is supported by much informed opinion.
But the trend since 1965 has been towards greater selectivity in
social security so assistance has been relied on, together with meanstested benefits such as FIS, rather than an improved universal service.
This approach claims to concentrate help on those who need it, but
there is evidence both that it fails to do this, because of low take up
of means-tested benefits, and that it can only do so at the cost of the
humiliation of clients. Although supplementary benefits can be claimed
as a right there is still a strong odour of reluctant charity about many
local social security offices’ treatment of claimants. The use of
discretion in making extra payments has led to underpayment of
many clients and the wage stop and the cohabitation rule, whereby a
woman loses benefit if living with a man as his wife, have been
applied too rigorously and unfairly. This is partly the consequence of
the SBC having to carry an immense burden of work in supplementary
insurance benefits. Working under constant pressure is not conducive
to the provision of a truly humane and flexible service. Unpleasantness
to supplementary benefit claimants is also the consequence of
unfavourable public opinion which is ever fearful of its funds being
misused by welfare scroungers. The low take up of many meanstested benefits is frequently the direct result of unpleasant practices
designed to put people off rather than to encourage them to apply.
The fact that more benefits can be obtained when clients are supported
in their claims by welfare rights workers indicates that clients on
their own are too humiliated or confused to persist in applications.
58
Poverty Alleviation and Housing Problem
Much of this depressing picture is the consequence of reliance
on a variety of selective means-tested services rather than universal
services. This reliance continues for the present but various proposals
have been made to improve the situation in the future. The most
important of these are: proposals for tax credits, a child benefit
scheme and provision for single-parent families. In 1972 the
government published a discussion paper, Proposals for a Tax-Credit
System. This proposed a form of income maintenance which would
operate through the tax system. Tax allowances would be replaced
by tax credits which could be set against tax assessed at a standard
rate of 30 per cent. If the tax assessed exceeded the credit due a tax
would be payable of the amount of the excess. If the tax liability was
less than the tax credit no tax would be payable and instead an
additional payment would be made. This would replace both child
tax-allowances, which primarily help the higher paid, and family
allowances and would supersede FIS. The scheme would cover all in
work and all insurance beneficiaries so it would help the elderly
pensioner as well as the low paid family but not those on
supplementary benefits.
There was much discussion of the tax credit system but a
change in government led to the proposals being dropped. The tax
credit idea was essentially selective, since it would have resulted in
payments being made only to low-income families although it was
hoped that by using the tax system the selectivity would be rendered
easy and non-humiliating. In August 1975 a Child Benefit Act was
passed providing for the extension of renamed family allowances to
the first child in single-parent families from 1976 and subsequently
to all first children. This does not appear to herald the radical
development in child-endowment policy which was hoped for although
it does at least extend the scope of a universal scheme for benefits.
But evidence that in a European context Britain lacks an adequate
family policy might influence the politicians to move more positively
in this direction in the future.
The particular needs of one-parent families wre studied by a
committee from 1969 to 1974. The committee’s conclusions, known
* Report of the Committee on One-Parent Families, Cmnd 5629, 1974.
Poverty and Social Security
59
as the Finer Report’, were an impressive account of the problems
faced by one-parent families and included numerous recommendations
for an improvement in their relatively disadvantaged position in society.
Amongst the practical recommendations the most important one was
for the introduction of a new non-contributory benefit, the Guaranteed
Maintenance Allowance. The GMA would involve a fairely substantial
payment to single parents, plus an allowance for each child, according
to means. GMA would be enough to remove single-parent families
from reliance on supplementary benefits and give single parents a
clear option to work or not. This specific proposal was not accepted
by the government but some help for one-parent families was
promised The announcement in 1975 of the payment of family
allowance to the first child in single-parent families from 1976, a
year ahead of the promised extension of the scheme to all first children,
was a small gesture of positive discrimination towards this group as
was the 1975 increase in single parents’ tax allowances. It remains
to be seen whether any more substantial measures will be introduced.
The failure to develop an effective family policy in Britain has
resulted both in a serious problem of poverty among families and in a
confusing proliferation of measures to help the poorest families. While
it is clearly necessary that the poorest are helped it would appear
that special programmes to help only poor families or certain groups
of families do not work well. Policies to support all families, financially
and in other areas of social provision, are more likely to be successful
and acceptable and it is hoped such policies will be developed soon.
The other major social security problem concerns the aged. The
immediate problem is that of today’s pensioners and their risk of
poverty. The changeover from assistance to supplementary benefit
was a response to the official discovery of the plight of old people
who would not claim their rights. But far too many old people are
still not prepared to claim supplementary pensions. Higher rates of
pension have been introduced and benefits are now to be uprated
each year in line with increases in the cost of living. But assistance
rates remain higher than insurance rates so substantial numbers of
old people will continue to need supplementary pensions and more
effort needs to be made to ensure a high take up.
60
Poverty Alleviation and Housing Problem
The higher social security benefit rates introduced from April
1975 were a welcome improvement but they still left the beneficiary
financially well below the average worker. To avoid this severe drop
in income especially in retirement, efforts have been made to develop
a wage related rather than flat-rate insurance system. The first
modification of the original system was the introduction of graduated
pension in 1959. These were grafted onto the basic scheme and
allowed contributors to opt 'out of payment if they were covered by a
suitable occupational pension scheme. The wage related idea was
extended in 1966 to contributions and benefits for sickness,
unemployment and other short-term benefits. Today the idea of wage
related insurance is generally accepted and changes in the system are
accordingly being implemented but in a rather confusing fashion.
Alternative schemes for earnings related pensions were produced by
successive governments. In 1971 the Conservative Government’s
White Paper, Strategyfor Pensions', was produced. This recommended
a basic flat-rate sate pension financed by graduated contributions and
then either a suitable earnings related occupational pension or a ‘state
reserve’ pension. There was much criticism of the state reserve scheme
on the grounds that it would afford very inferior cover for the lower
wage earners and that it would be out of line with European
experience. The proposals became law by the Social Security Act of
1973 but before they became operative a change of government took
place. The Labour Government put an amending Act through
Parliament in 1974 which meant that the basic scheme proposed in
the 1973 Act (as described in the earlier section), became effective
from 1975, but the state reserve scheme was scrapped. A White
Paper, Better Pensions, was produced in 1974" and a Pensions Bill
went before Parliament in the spring of 1975 to become effective by
1977-78. The new scheme for Better Pensions is based on the existing
basic insurance scheme and the aim is to provide adequate wage
related cover in retirement, widowhood or chronic ill-health.
Contributions will be wholly earnings related and the scheme will,
* Cmnd 4755. Strategy for Pensions: The Future Development of State and
Occupational Provisions.
** Cmnd 5713. Better Pensions. Fully Protected Against Inflation. Proposals
for a New Pensions Scheme.
Poverty and Social Security
61
like its predecessor, operate in partnership with occupational pension
schemes. One important innovation is that the new scheme will apply
equally to men and women contributors. Women will no longer be
dependent on men for their pensions, reflecting the much greater of
women in work in recent years. In future married women will pay
full contributions for long-term benefits but may contract out of
short-term benefits. Those who are in suitable occupational pension
schemes can contract out of part of the state cover and will pay,
therefore, a reduced contribution. For the majority, pensions will be
based on the earnings on which contributions have been paid in the
individual’s best twenty years. The weekly pension will be a base
level pension and a quarter of earnings between the base level and a
ceiling of seven times that amount No one will get less than the base
level pensions whatever their contributions and all pensions include
this element so the scheme is particularly advantageous to those on
low incomes. The scheme will mature in twenty years and all pensions
will be guaranteed agains inflation because past earnings will be
revalued in line with the average earnings of the year of retirement.
After retirement the base level element of the pension will be
maintained in its relationship with current earning levels while the
remainder will be protected against price increases.
These proposals are complex but they should ensure that both
men and women, either by state cover alone or by state insurance
plus occupational cover, will have earnings related pensions, fully
guaranteed against inflation, which will afford security in retirement
or widowhood or chronic invalidity. Security means an end to
dependence on supplementary benefits and an end to a catastrophic
drop in income after retirement. This has long been an aim of social
policy and it is hoped that the proposed system will be implemented
and will prove effective for many years ahead.
It can be seen that we have a bewildering range of social
security provisions and these are still muddled and ineffective in
respect of families and under process of radical revision in respect of
the long term dependency of old age and invalidity. There is less talk
nowadays of abandoning insurance or relying on comprehensive
negative income tax solutions to the problems of income maintenance.
62
Poverty Alleviation and Housing Problem
It is now generally accepted that there is no simple soultion to the
problems of poverty and no easy replacement for our complex,
apparently contradictory, social security system. Any change is
difficult because of the vested interests of long-established schemes,
the range and diversity of the needs it is trying to meet, and the
confusion which abounds over its real aims. Inevitably when we
examine the income maintenance field our primary concern with
absolute poverty moves on into an attemtpt to tackle relative
deprivation and ends up trying to decide what is meant by social
justice. We are increasingly aware that the state’s social security
system should not be viewed in isolation from fiscal and occupational
welfare measures or, indeed, from the general distribution of rewards
in our society; that lack of cash resources is only one aspect of
poverty and our reforming policy must embrace the concomitant evils
of bad housing or lack of education; that the machinery of social
security reflects attitudes and values prevailing in society and can be
used to achieve considerable redistribution of income or to underline
a callous or patronizing rejection of dependent groups. In attempting
to overhaul the social security system, we must look, therefore, not
only at strategies but at aims. This brings us back, remorselessly, to
the initial question of what we mean by poverty. In searching for a
definition we must, quite properly, raise even more fundamental
questions about the whole structure and values of our society even as
we simultaneously struggle to comprehend the economic,
administrative, and straightforwardly human implications of tedious
social security techniques.
4
The Poor
Settlement house workers, muckraking journalists, and social reformers
sang a monotonous dirge about poverty in the half century before the
Great Depression of the 1930s. That dirge repeated a powerful and
recurrent theme—that poor people suffered mainly from weaknesses
in the economy, not from moral flaws. A few examples from this
litany suffice:
Low Wages, New City, 1890: There were nine in the family:
husband, wife, in aged grandmother, and six children; honest,
hardworking Germans, scrupulously neat, but poor. All nine
lived in two rooms, one about ten feet square that served as
parlor, bed-room, and eating room, the other a small hall-room
made into a kitchen. The rent was seven dollars and a half a
month, more than a week’s wages for the husband and father,
who was the only bread-winner in the family. That day the
mother had thrown herself out of the window, and was carried
up from the street dead. She was “discouraged,” said some of
the other women of the tenement.
Women's Work, 1890: Here is the case of a women employed
in the manufacturing department of a Broadway house. It stands
for a hundred like her own. She averages three dollars a week.
Pays $1.50 for her room; for breakfast she has a cup of coffee;
lunch she cannot afford. One meal a day is her allowance. This
women is young, she is pretty. She has “the world before her.”
Is it anything less than a miracle if she is found guilty of
nothing worse than the “early and improvident marriage” against
which moralists exclaim as one of the prolific causes of the
distress of the poor? Almost any door might seem to offer
welecome escape from such slavery as this.
The Poor
64
Poverty Alleviation and Housing Problem
"Sweating” in Tenements, 1905: The workers, poor, helpless,
ignorant foreignes, work on in dirt, often in filth unspeakable,
in the presence of all contagious and other diseases, and in
apartments in which the sun enters only at noon or never at all.
In such an apartment I attended a woman ill with tuberculosis,
finishing trousers. . . Three years of life in this apartment killed
the woman. ... As soon as a little child can be of the least
possible help, it must add to the family income by taking in a
share of the toil . . . The other day a girl of
8 years was dismissed from the diphtheria hospital after a severe
attack of the disease. Almost immediately she was working at
women’s collars, although scarcely able to walk across the
room.
Slack, Seasonal Work Pittsburgh, 1920s: Mr. Contillo is one
of nine children. His whole family came to America in 1907.
Mrs. Contillo was also bom in Italy, coming here in 1911. In
the sixteen years of their married life, the Contillos have had
seven children. . . Mr. Countillo has always been a laborer,
working for whatever company advertised for workers. A year
and a half is the longest time that he has ever worked for any
one company, but his periods between jobs were rarely more
than a week. . . This past winter, 1928-29, he has had no
steady work for five months, and only ten days of special work.
The greate disaster resulting from Mr. Contillo’s unemployment
has been its effect on his point of view. Before this last winter
he was cheerful, fond of the children, content with Mrs.
Contillo’s management of the house and very neighbourly. The
two factors, unemployment and his neighbourliness, have proved
his undoing ... He has become a steady drinker, though before
he was never drunk except on holidays . . . Mrs. Contillo says
that half the time she sits by the fire drunk; occasionally he is
violent toward the children and frequently threatens to kill the
boarders.
Racial Discrimination, 1920s: William Lovejoy, a carpenter of
Cleveland, is a Negro. The Negro is harder hit in dull times
than the white, although differently. During the course of a
year he will have had more jobs but also more unemployment
65
than the average white worker...Lovejoy finished grammer
school and the first year of high school in Georgia. His wife,
too, had a fairly good education at a girls’ school. Her mother
had been a school-teacher. Lovejoy’s father and older brothers
had been carpenters, and he had learned his trade from them.
He was forced to join the carpenters’ union in 1923. Then,
because union wages were as high for coloured workers as for
others, his white employers dropped him from the payroll and
hired white help instead. For the past seven years he has
depended on odd jobs of any kind. . .
During spells of unemployment they have lived on next to
nothing, so the children [they had nine] have been much
undernourished. . . . Often the whole family went hungry,
particularly the father and mother. . . Somehow they have
managed to exist without calling upon agencies for help . . .
Through every vicissitude, it has been the family aim to keep
the children in school at all costs . . .
Depressed Areas, 1920s: Says that trade shift oust you. You
are Nicholas Poulos of Boston. In the nineteen years since you
came from Greece, you have worked in shoe factories there.
But the shoe industry has increasingly left New England. In
your early days you had no work for one month, part time for
three months, and full time the rest of the year. Now you work
full time for one month, and part time for five, and for the
remaining six you do not work at all. Since even for full time
you never received more than $25 a week, on which your wife
Helen and your three children have had to live, it is thanks to
Helen’s extra ordinary thrift that you made any savings at all.
What has the decentralization of the shoe industry done to
you?
This is what happened to the Nicholas Poulos family. First they
lost two insurance policies. Rent fell in arrears, so the mother,
Helen, found work in a laundry. During the weeks in which
Mr. Poulos also had work, her weekly earnings of $12 enabled
the family to pay back some of the money they owed to their
friends.
Poverty Alleviation and Housing Problem
66
But Mrs. Poulos worked beyond her strength. In spite of her
utmost efforts at management, her children had to be neglected.
The youngest was reported by the school as being under
nourished and had to be fed at the School Diet Kitchen. She
resented her husband’s idleness, said he did not try to find
work. He became inert and fatalistic. They quarreled and were
under constand domestic strain.
The Poor
67
of poverty—one around 1900, the other of the late 1920s—reveal the
major points about poverty in those times: first, that it rested on a
frighteningly broad base around 1900, and second, that it declined
slowly but appreciably during the next thirty years of economic
progress.
The social workers who wrote these reports did not sympathize
with all the poor. Some of the needy, they believed, were “paupers,”
improvident people dependent on relief. Other poor people, they
thought, belonged to the “dangerous classes.” The experts of that
rapidly urbanizing age were easily disgusted by crowding and dirt,
often obsessed with the need for open spaces, playgrounds, and
cleanliness. The social workers habitually used a “case study” method
that focussed on the problems of individual families and unintentionally
blurred the underlying environmental forces they wished to expose.
Readers of their case studies might pity poor families without
appreciating fully the broad base of poverty in late nineteenth-and
early twentieth-century Ameria.
The earlier snapshot was taken by Robert Hunter. The son of a
Terre Haute, Indiana, carriage manufacturer, Hunter was an
impressionable nineteen-year-old when the depression of 1893 threw
millions out of work. After graduating from Indiana University in
1896, he moved to Chicago, where he lived at Jane Addam’s Hull
House settlement as a social worker. He travelled to Europe, where
he met important socialists and radical leaders. Hunter read the
contemporary published studies of poverty and lower-class life: Jacob
Riis’s How the Other Hulf Lives (1890)., Amos Wamer’s American
Charities (1894)., Charles Booth’s multivolume monument, Life and
Labour of the People in London (1889-1903), and B. Seebohm
Rowntee’s influential study of York, England, Poverty: A Study of
Town Life (1901). Drawing upon these and other books, Hunter
published in 1904 Poverty, a classic of the literature.
But social workers of 1900 should not be judged by the different
standards of public policy since the 1930s, for few other Americans
paid any attention to the poor at that time. Moreover, the case studies,
however monotonous, inevitably exposed the major causes of poverty,
including personal problems such as illness, disability, drink, old age,
and death of a bread-winner. This was “case” poverty, a curse in any
society. But poverty, social workers recognized, also afflicted millions
among the young and able-bodied. These people suffered from a
range of social and economic problems: technological disruption,
economic recessions, business failures, and depressed areas. The basic
causes, of poverty were not personal weakness but two deeper
problems: an economy insufficiently abundant to provide subsistence
for all the able-bodied, and a social order that inequitably distributed
what wealth there was. In these fundamental ways poverty was then
and continued to be a structural, not a moral, matter.
In his book Hunter admitted that “the extent of poverty in the
United States (was) absolutely unknown.” He nonetheless snapped a
picture of destiution that, although flawed in important respects,
exposed its structural foundation. He estimated that 10 million
Americans—12 per cent of the population of 82 million—were poor
in 1904. Most of this poverty, he wrote, was in northern industrial
areas, where about 6.6 million people, or 20 per cent of the population,
were poor. The incidence of poverty in the South, he guessed wrongly,
was about half as great. He showed that 20 per cent of the people of
Boston were in distress in 1903, that 19 per cent of New York
State’s population was needy in 1897, and that 14 per cent of
Manhattan’s families were evicted from their homes in 1903. Citing
Riis, he observed that one-tenth of New York City’s dead received a
pauper’s burial between 1885 and 1890, and that only about 4 million
of the 10 million poor in America received any public relief.
Fortunately for historians, a few writers prior to 1930 did
something more than tug at the emotions of readers. Two snapshots
Hunter, who turned to socialism at the time he wrote the book,
was well aware that income was badly distributed. He knew that
»
68
Poverty A lleviaiion and Housing Problem
The Poor
poverty “as a relative concept and that drawing an absolute “poverty
line” was arbitrary; moving the line up or down a little greatly changed
the number defined as poor. Still, like all the pioneering writers on
the subject, Hunter used an absolute definition of poverty, which he
set as $460 a year for an average-sized family (five people) in northern
industrial areas, and S300 for such a family in the rural South. Families
with lower incomes were “not able to obtain those necessaries which
will permit them to maintain a state ofphysical efficiency" and were
“underfed, underclothed and poorly housed.” To live at the poverty
fine, Hunter explained, was to adopt the “same standard that a man
W'ould demand for his horses or slaves.”
This absolute definition, based on estimated by social workers
and nutritionists of people’s elementary needs, employed the same
reasoning used by Booth, who found 30.7 per cent of London in
poverty between 1887 and 1892, and Rowntrees, who discovered
that 27.8 per cent of York’s population was poor in the relatively
prosperous year of that poverty in the United States was probably
less prevalent that in England.
Even those people slightly above Hunter’s poverty line struggled
every day to stay afloat. Urban families with three children and
earning to S5OO-S8OO in 1900 typically owned little furniture and no
real estate. They rented two-or three-room flats without hot or even
running water and without indoor flush toilets. They subsisted on
bread and potatoes. Illness or loss of a job quickly wiped out whatever
savings the provident were able to amass. There was no unemployment
insurance, little public welfare, virtually no old-age pensions. If all
else failed, most poor persons could turn only to local politicians and
chairities or take refuge overnight at the police station. Seeking charity
was a time-consuming, frustrating, and sigmatizing experience.
In identifying the needy, Hunter and other writers distinguished
between the poor, victims of the economic system, and paupers, who
had long been labeled as “undeserving,” who had “lost all self-respect,
who rarely, if ever, work, who are aimless and drifting, who like
drink, who have no thought for their children, and who live more or
less contentedly on aims.” How many of the indigent fit this
unflattering description was not clear. Wamer’s authoritative book
69
on charity, published in 1894, concluded that 25 per cent of poverty
stemmed from what he called personal misconduct. Edward Devine,
a leading New York charity worker, was probably closer to tfie mark
in holding that 12 per cent of a sample of 5,000 relief cases (the most
dependent among the poor) in 1907-1908 were improvident. Such
experts, believing that paupers dragged down the “deserving” poor,
wasted little sympathy on them. Warner recommended the “permanent
isolation of the essentially unfit.” Booth wanted them to be “gradually
harried out of existence.” The improvident, he thought, should be
placed in work camps and removed from the labour market. Even
Hunter was cold. “It would be unwise,” he concluded, “to legislate
out of existence, even were it possible to do so, that poverty which
penalizes the voluntarily idle and vicious. . .The poor who are always
with us, are, it seems to in poverty of their own making.”
Much more numerous than the paupers were the unfortunate
dependents who fell into poverty through no fault of their own, such
as the disabled, the chronically ill, the aged, and women with
dependent children. Devine found that 12 per cent of poor households
were headed by a man temporarily disabled or mentally ill, 30 per
cent by widows or permanently disabled men, and 6 per cent by old
people. Two-thirds of the individuals in his sample were either women
or children under fourteen. Devine’s figures pointed to an enduring
truth about modem American poverty. Then and later, dependency
was a major source of destitution.
Hunter’s focus was more on the problems of low wages and
unemployment, which he regarded as the curse of industrialization.
His was in fact a classic structural analysis of poverty as it affected
able-bodied working people. Using the census of 1900, he estimated
that 6.4 million workers, or 22 per cent of the labour force, were
unemployed at sometime during that year. He guessed that about 2.5
million of these people—mostly unskilled—were jobless for four to
six. months, and 780,000 for seven to twelve months. None of these
workers received unemployment insurance, which almost no one in
America endorsed at the time.
Othere writers reported a similar focus on the relationship among
industrialization, underemployment and poverty. Rowntree blamed
70
Poverty Alleviation and Housing Problem
low wages for 52 per cent of York’s poverty; Devine figured that 69
per cent of his heads of households in 1907-1908 were employable
but out- of work; and Booth thought three-fifths of London’s poor
were jobless. Booth and others refused to draw from such data the
Marxian tenet that industrialization spawned a vast “reserve army”
of unemployed workers. But Hunter was more bold:
Much of our poverty is directly due to a whole series of
economic disorders which seem actually to make waste of
human life necessary. And in so far as poverty is a result of
such deeply seated and fundamental economic disorders, due
either to the method by which industry is organized or the
present ownership of the means and materials of production, it
will, in all probability, find a solution only through struggles
between the workers and the capitalists.
This, then, was Hunter’s snapshot of poverty in 1900: 20 per
cent poor in northern industrial areas, 10 per cent in the South a little
malingering and pauperism, much dependency; serious unemployment;
industrialization threatening further to impoverish the nation.
Hunter’s portrait was incomplete. It did not provide a historical
or comparative dimension to the problem of poverty. In his zeal to
focus on industrialization in his time, he did not discuss the truly
terrible poverty that had existed in preindustrial Europe. Probably
one-half the population of England before 1720 suffered from poverty
and constant under-employment Under-nourished, living in unsanitary
conditions, these people suffered from tuberculosis, gastric ulcers,
influenza, smallpox, dysentery, and in the seventeenth century, bubonic
plague. In London, a refuge for the land-starved poor, about 60 per
cent of the boys in the mid-seventeenth century died before the age of
sixteen. To make life tolerable, the English turned heavily to drink.
Alcohol, indeed, was “an essential narcotic which anaesthetized men
against the strains of contemporary life.
Life in seventeenth and eighteenth-century France was no better.
In the late seventeenth century thousands of land-poor peasants poured
out of hill villages into the plains of Languedoc, where, too weak to
walk farther, they died of starvation. Widespread malnutrition in the
area around Beauvais in the 1690s caused infertility among the women
The Poor
71
and killed whole families that were too weak to resist disease. These
rural folk subsisted almost entirely on cereals; they suffered from
typhoid, typhus, enteric fevers, scarlet fever, pneumonia. Desperate,
they commonly abandoned children, and some practiced infanticide.
In their frenzy, they banded together and raided neighbouring villages.
On the eve of the French Revolution in 1789, one-third to one-half
the population was destitute.
America was spared such conditions. Though never a wholly
egalitarian society, it did not at first develop sharply defined social
classes or mass rural poverty. But from the start many American
farmers lived on the margin, in circumstances that appalled
contemporaries who took the trouble to find them. In 1800 Michael
Gaffney, a wealthy resident of Charleston, South Carolina, visited
the back-country near Spartanburge. He wrote:
The country for about one hundred and fifity miles from
Charleston is extremely low and unhealthy. The people looked
yellow, poor and sickly. Some of them lived the most miserably
we ever saw any poor people live. . . Their dress is generally a
hunting shirt and some trousers of coarse cotton yam. . . The
women of this country live the poorest lives of any people in
the world. It is directly opposite to Charleston; here they must
do everything from cooking to plowing and after that they have
no more life in them than India squaws.
These conditions had nothing to do with industrialization, which
did not affect the United States at that time. Rather there was poverty
wherever Americans attempted to farm poor land or competed
unsuccessfully with larger operators in the commercial market. Unable
to make a living, many rural people began flocking to cities as early
as the mid-eighteenth century, where they were joined by immigrants
from abroad. Even then, urban poverty was pressing. In 1772, 25 per
cent of the free men in Philadelphia were poor or near poor. By 1815
New York City gave public aid to 19,000 people, one-fifth of its
population. Some historians have gone so far as to claim—on
admittedly sketchy evidence—that as many as one-fifth of whites
and virtually all blacks lived in poverty during the late eighteenth
century.
72
Poverty Alleviation and Housing Problem
Like Hunter, other urban-oriented writers such as Riis also
slighted the problem of agricultural poverty. But it was unfortunate
that they did not talk about the problems of rural areas in general and
of the South in particular, for both prior to Hunter’s time and for
decades thereafter the South showed by far the highest incidence of
poverty in the nation. Hard times after 1860 perpetuated a deeply
depressed lower class of share-croppers and tenant farmers, who
suffered heavily from hookworm, pellagra, and malnutrition.
Thousands were driven to eating clay from the chinks in their roughhewn cabins. Oppressed, they straggled into mill villages, where
conditions wer frightful: average wages in the 1890s of $3 for a
seventy-hour work week—SI 50 per year. But because whole families
could earn a little, they were able to live better than they had in the
backcountry.
The flight of poor southern farmers from the land was but a
part of the vast urban migration in western industrialized countries in
the nineteenth and twentieth centuries. And from the standpoint of
income, they usually bettered their economic conditionl. In the United
States and Great Britain the real wages of factory workers improved
in the late nineteenth century. So did diets and heal standards; people
who had once lived on bread and potatoes began to enjoy a more
varied diet. Though cities sometimes were the sinkholes of
concentrated human misery perceived by nostalgic writers like Riis,
they were also places that promoted economic progess. Neither in
1900 nor at any time since has the connection between urbanization
and poverty been so simple as Hunter suggested.
Hunter might also have been a little more precise in labeling
industrializations as the villain. It was true, of course, that industrial
fluctuations caused widespread unemployment, but it did not
necessarily follow that workers in non-industrial urban occupations
were better off. Both before and after heavy industrialization, causal
labour, low wage work, and under-employment in commerce,
transportation, and retail trade contributed mightily to poverty in the
United States and elsewhere. In failing to give due emphasis to these
aspects of poverty, Hunter and his contemporaries reflected the almost
mesmerizing effect of industrialization on people raised in that more
rular generation.
The Poor
73
Because Hunter set his poverty line so low ($460 a year for a
family of five), he was conservative in his estimate of the extent of
poverty. John Ryan, a leading advocate of a “living wage,” thought
that $600 ($800 in some places) was the minimum necessary for a
family with three children. Under this definition, millions whom Hunter
did not count as poor slipped under the line. Using a line of $700 for
a family with three children, more than 40 per cent of wage earners
and clerical workers were living in poverty at the time.
Employing estimates such as Ryan’s, it is possible to set the
total poverty population of America at between 30 and 50 million—
three to five times Hunter’s estimate. This is not to say that Hunter
was was ill-informed—he used what data he had carefully—but to
suggest that all absolute definitions of poverty depend on the standards
employed. Hunter’s were conservative, even for his own time. Given
the wide base of America’s income pyramid since 1880, there are
inevitably as many(more) near-poor as there are those who fit official
definitions.
It is worth remembering also the modest expecations of people
in that era. One scholar who has estimated the cost of living over
time has suggested that Hunter’s standard of $460 was equivalent in
real earning power to around $ 3,000 in 1977. Yet in that year the
Social Security Administration set a poverty line more than twice as
high, or $ 5,981 for an urban family of four. The 1977 definition
reveals what all students of proverty have recognized: definitions of
poverty have grown steadily more generous over time. If one applied
the standards of 1977 (or even of 1937) to Hunter’s time, only a very
small percentage of Americans would be defined as living above the
poverty line.
The snapshot approach, as Hunter also realized, finally fails to
distinguish the short-term from the long-term poor, and therefore
tends to underestimate the poverty problem. Were the 12 per cent
who were poor in 1904 the same individuals who had been poor in
1903 and were to be in 1905? How many of the unemployed in 1900
had been out of work in 1899 or might lose their jobs in 1901?
Neither Hunter nor anyone else knew the answer to these questions.
But 20 million or so “non-poor” Americons had family incomes of
74
Poverty Alleviation and Housing Problem
only $ 100 to $ 300 more per year than Hunter’s poverty populations.
Any misfortune—illness, loss of a job—could throw them under the
line. So could hardships common in the life cycles of heads of families,
in the years when they had to support children too young to work,
and later’ in their forties and fifties, when they were turned out of
their jobs without pension. The number of individuals therefore who
experienced poverty at various times in their lives was vastly higher
than Hunter’s 10 million, higher than any snapshot could ever reveal.
This problem of marginality indeed, was rarely to receive in America
the attention it deserved.
Impression about the dimensions of poverty over time makes it
impossible to answer the still broader question: how was poverty in
1900 different from poverty since that time? Some writers in the
1960s, such as Michael Harrington, gave the impression that most
poverty at the turn of the century was rooted in essentially economic
weaknesses that were great at that stage of capitalism.The “new”
poor of the 1960s, by contrast, were according to Harrington, deprived
minorities who were immune to the country’s economic progress.
Abandoned and hopeless, they wallowed in a “culture” of poverty.
As another writer proclaimed, “Hunter’s enigma was acute and
cyclical; that of the sixties seems chronic and structural.”
Other writers reject this “bad new days” view. They stress that
the poor in 1900, especially blacks, had been mired for generations
in poverty and lived in quite different culture from the middle class.
In the North workers in company towns and immigrants in urban
ghettos were more cut off from middle-class ways of life and aspirations
than were poor Americans in the age of mass media and mass
education after 1950. Isolated, indeed trapped, the poor of 1900 knew
not what they missed and therefore subsisted in a barren world. One
scholar, employing this “bad old days” approach, concluded that the
poor in late-nineteenth-century America had “different values” and
formed a kind of “sub-culture.” “Poor people were not merely rich
people with less money, ability, and opportunity. In many ways they
were in different societies altogether.”
The absense of longitudinal studies of poor people makes it
very difficult to assess either perspective on poverty over time.
The Poor
75
Inferring from subsequent development, however, it appears that the
bad-old-days argument is statistically accurate in an economic sense:
the percentage of Americans defined as poor by consistent standards
was as high the late nineteenth century as it ever had been or was to
be. Hunter, in short, was right in pointing to the high incidence of
poverty in 1900, though wrong in implying that industrialization was
inevitably and progessively impovershing. Using some contemporary
definitions of poverty (which have risen over time), it is roughly
acurate to say that 40 per cent of Americans were poor in 1900, 3340 per cent in the Great Depression , 25 per cent in the mid- 1950s,
and 6-15 per cent between 1970 and 1980. If one applies the stringent
standards of 1900 to later periods’ improvement is still more dramatic.
Those who employ the bad-old-days perspective to talk about a
culture of poverty in late-nineteenth-century America seem at first to
have a plausible case. Well before then observers had perceived
lower-class sub-cultures that reveled in cockfights, taverns, and fairs
and believed in witches and fortune-telling. Other observers, especially
after the wave of immigration in the 1840s and 1850s trembled before
the specter of the dangerous classes and of “wild Irish slums.”
Hunter, like most reformers at the turn of the century, loathed some
of the lowest classes, who existed in a “culture bed for criminals,
paupers, vagrants, and for such diseases as inebriety, insanity and
imbecility.” Ignore this cancer, he said and “the dependency of the
adults infects the children, and the foulest of our social miseries is
thus perpetuated from generation to generation.”
Allowing for the special colour of Hunter’s medical mataphor
and remembering that he meant to describe a small minority of those
in need, it is obvious that he perceived a real problem. The “dregs”
(the lazy and apathetic) and “skidders” (alcoholics, drug addicts)
tended to congregate in the poorest sections of the cities, and to
reinforce a lower class that lived without hope. They suffered not
only from personal weaknesses but also from low income and
exploitation of all sorts: by juvenile gangs, the underworld, grasping
landlords, and corrupt police. Writers like Riis, though nostalgic for
the simpler life of the countyside, did not much exaggerate the squalor,
and disorder of their lives.
76
Poverty A lleviation and Housing Problem
But this approach distorts reality. It is doubtful that the “culture
bed for criminals, paupers, and vagrants” represented more than about
5 per cent of the poverty population in 1900. Many other poor people—
landless workers, new immigrants—lived in close physical proximity
to the hopless 5 per cent without becoming “ infected” with the
disease of pauperism. They developed a network of self-help activities,
including unions, churches, mutual aid societies, building and loan
association, and urban political connections. They depended especially
on kin and ethnic ties. These people never expected to get much help
from social workers, let alone the government. They worked long
hours at manual labour; they sent their children into the factories,
mines, and mills; their wives took in boarders. They earned to rise,
and many of then did. One careful study of social mobility concluded
that between 30 and 40 per cent of the sons of blue-collar workers in
American cities attained middle-class occupational status between
1880 and 1930. Blacks, the poorest Americans, moved to cities after
1914, showing that they shared many of the economic aspiration of
non-poor Americans. They clung to their own cultural traditions, but
they neither inherited nor passed on a “ culture of poverty.”
The image of a culture of poverty nonetheless persists. If 40 per
cent of the sons of blue-collar people moved out of manual occupations,
what about the remaining 60 per cent? Some—perhaps a sixth—
became skilled workers. But how many of the rest passed on to their
children a more-or-Iess permanent poverty, as opposed to low
occupational status? Probably not many, but that is a guest inferred
mainly from statistic on occupational distribution over time and on
poverty in the 1960s and 1970s. More puzzling, what was the role
of cultural inheritance? Were particular groups, such as Jews,
especially well equipped to escape poverty while others were not?
Writers at the time did not much explore this question, and some
(including Riis) tossed about what latter generations recognized as
crude and damning stereo-types of ethnic groups. Historians still
cannot confidently single out the role of cultural inheritance in the
transmission of economic poverty across the generations.
Talk of an intergenerational culture of poverty, however
intriguing, obscures the highlight of any snapshot of 1900: the
The Poor
n
economy at that time was not abundant enough to prevent a uniquely
high percentage of Americans of all ethnic backgrounds from falling
into poverty. From this economic perspective, an emphasis on the
familial or cultural attributes of the poor is highly misleading, and
nostaligia about the good old days is nonsense.
In the 1920s optimistic businessmen and social scientists thought
the United States had entered a “new era.” As Herbert Hoover said
in 1928, “We shall soon, with the help of God, be in sight of the day
when poverty will be banished in the nation.”
So assured and statistically minded a social engineer as Hoover
could not have been altogether wrong. And he was not. The national
income, in constant 1913 dollars, increased from $ 24 billion in 1900
to $37 billion in 1929. Income per capita, in the same 1913, dollars,
rose from $320 to $473 in the same period. After a sharp depression
in 1921, per capita income rose every year until 1929. Though
students of the question haggle over statistics, it is fair to conclude
that real per capita income was one and a half times as great in 1929
as in 1900.
Improved standards of living accompanied these gains. However,
one measured such standards—diet, size and quality of housing,
number of home appliances—most Americans were better off in the
1920s than they had ever been. Even a working-class family could
afford to buy a Model T Ford, which cost less than $300 in the late
1920s. Most dramatic were improvements in health, reflected in
statistics on longevity. Life expectancy at birth was 47.3 years in
1900, 59.7 in 1930. The aging of the population during these and
later years was one of several demographic development (migration
from poor rural areas to this cities was another, and family breakup
was a third) that dramatically affected poverty and public policy in
modem America. Aging increased the extent of dependency, promoted
organized movements for pensions, and led ultimately to sustenance
of a social security system that by 1980 represented a staggering
expense.
But statics on health or housing do not measure poverty. Indeed
few writers attempted such measuring in the years between Hunter’s
n
Poverty Alleviation and Housing Problem
findings and the Great Depression. Although social scientists in the
intervening decades sponsored numerous studies of the cost of living
and charted the amounts spent by various income groups on food,
clothing, and shelter, they did not attempt very sophisticated overviews
of poverty per se. Like Hoover, they assumed that economic progress
would drive poverty away.
In 1934 the Brookings Institution came close to remedying that
neglect when it published its volume, America's Capacity to Consume.
As the title suggested, the book focussed on income
maldistribution, not on poverty, and offered a case for the expansion
of purchasing power. Its premise, that experts could direct economic
growth, exposed its faith in social engineering. Nonetheless, the book
described a structurally deep economic want that had been hidden in
the optimistic years before 1930.
The Brookings authors used a family poverty line (without
calling it that) of $2,000. This was higher in real purchasing power
than Hunter’s $ 460 (it corresponded to about $700-$800, dollars)
and higher than other contemporary estimates (which ran as low as
$1,200). But the line of $2,000 was not overly generous, for it was
“sufficient to supply only basic necessities.” The authors estimated
that 16 million American families, about 60 per cent of the total,
involving at least 70 million people, received less than that amount in
1930.
Words like “poverty” and “destitution” appeared rarely in this
and other studies, but it took no great imagination to see what such
figures meant. The brokings authors noted that a family of five had
to earn $3,000—an amount amassed by only 25 per cent of America’s
21.6 million non-fann families to pay for an “adequate diet at moderate
cost.” The 7.5 million non-farm families.(30 million people) earning
less than $1,500 could afford to spend only $350 to $500 a year on
food—enough for “diets for emergency use” or “adequate diets at
minimum cost,” respectively.
The Brookings study depicted rural poverty more clearly than
Hunter had. The average income of the nation’s 5.8 million farm
families, it showed, was only $1,240. Moreover, the authors estimated
that 54 per cent of farm families, about 17 million people, earned less
The Poor
79
than $1,000 a year. These were the poorest of America’s poor. Within
fifteen years these people, many of them black, began a mass migration
to cities that dramatically urbanized poverty and provoked anguished
talk of a “welfare crisis” in the United States.
Given the depressed condition of agriculture, it was not
surprising that the South showed the lowest income levels. The
Brookings study oberved that per capita income ranged from a high
of $1,107 in New York, New Jersey, and Pennsylvania, to a low of
$344 in Kentucky, Tennessee, Alabama, and Mississippi. In twelve
states, all in the South, the per capita income of the farm populatation
was below $200. These data suggested that one long-range answer
to America’s poverty could be large shifts of population out of the
rural areas of the South and the plains and into the cities and subrubs.
In any event the statistics gave little comfort to those who yeamed
for decentralization of the population and restoration of the small
family farm.
What then, of Hunter’s worries about the insecurity and
depenency that accompanied industrialization? It was testimony to
the optimism of the New Era that few unemployment statistics were
collected before the Great Depression: those that did exist offered
both good and bad news. The good was downward movement over
time in unemployment rates. Where Hunter had found 22 per cent of
the non-agricultural work force out of a job at sometime in 1900,
subsequent studies suggested that the average between 1910 and
1929 was closer to 8-10 per cent, three to five million people, in
manufacturing, transportation, building trades and mining. Also,
industrial workers in the 1920s apparently moved less often than
they had in 1900 and held jobs for longer period of time. This trend
reflected not only the relative prosperity of the period, but also the
conscious effort of business leaders to cut back on job turnover and
of unions to write seniority rules into contracts. Hunter and other
socialists of the time had underestimated the ability of capitalists to
mold a productive, geographically more stable, though by no means
docile work force.
Statistics on employment for some of the best years were
especially heartening. In 1929, for instance, there were 47 million
80
Poverty Alleviation and Housing Problem
people in the work force, 19, million more than the 28 million in
1900, and the economy was able to employ all but 1.6 million of
them. For that good year, the census showed 3.2 per cent of the
labour force as unemployed. The apparently limitless capacity of the
economy to absorb an ever-larger number of workers understandably
impressed contemporaries and led to illusions about the abolition of
want.
)
The bad news exposed persistent social and economic problems.
One appeared in impressionistic surveys of hobos, of whom an
estimated 300,000 to 500,000 a year—not always the same
individuals in each year—passed through Chicago alone in the early
1920s. These were not floating industrial workers so much as a
“hard-living” bunch of drifters displaced from the countryside. Black,
moreover, remained so deprived and isolated as to be virtually invisible
to reformers. The Brookings study did not mention race. George
Schuyler, a prominent balck intellectual, explained later, “The reason
why the Depression didn’t have the impact on the Negro that it had
on the whites was that the Negroes had been in the Depression all
the time.”
The deepest problem remained the insecurity stemming from
low wages and unstable jobs. Large-scale movements of industries,
such as the shift of textiles from New England to the Piedmont,
desolated whole regions. Mining and agriculture were depressed
occupations throughout the 1920s. Frequent, unheralded downturns
in the business cycle, in 1907-1908, 1913, 1914 and 1921-1922,
ravaged a work force that was still without rmemployment insurance.
In the worst of these downturns, in 1921-1922, estimates of
unemployment among manufacturing workers began at a conservative
14 per cent. A careful study of Philadelphia in the supposedly
prosperi ous month of April 1929 revealed that 77,000 (16 per cent)
of the city’s 481,000 families were suffereing from unemployment.
Of these, 50 per cent were out of work for three months, 28 per cent
for six months or more, and 12 per cent for at least a year.
The human dimensions of this structural poverty are best
captured by novelists or by the case studies of social workers. In the
main, however, improvements in living conditions between 1900 and
The Poor
81
1929 did not much affect the poor. The rural poor still crowded into
ramshackle, drafty structures without hot or running water, indoor
plumbing, or electricity. They had only the most rudimentary social
services, including education. The urban poor lived better, but still
inhabited run-down, ill-furnished, crowded flats and tenements. These
poor—as opposed to regularly employed skilled workers—did not
own real estate or amass savings. Poor Americans, abandoned in the
hinterland or penned in urban enclaves, had little sense of common
cause. They were insecure, and their lives were sore afraid.
What they thought about their existence can scarcely be
generalized, for the poor have never been an undifferentiated mass.
Hard-living hobos, migrant farm labourers, and floating industrial
workers resembled one another superficially in that they all moved
about. But they had different backgrounds and different aspirations.
Immigrants, many of whom remained poor, seemed to some outsiders
a homogeneous mass. But their distinctive cultural heritages affected
family organization, work habits and goals. Moreover, in the 1920s
the sons and daughters of immigrants looked at a world brighter than
that of their fathers and mothers in 1900—and much brigher than
that of the blacks penned in the ghettos or stranded in the backcountry
of the South. And how could anyone generalize easily about the
values of “the poor”? Those of a fourteen-year-old-boy, classified as
a dependent in a poverty-stricken family, could hardly be equated
with those of a sixty-year-old widow or a fifty-five-year-old man
who had lost his job or a thirty-year-old mother of three small children
whose father had deserted. Yet all were likely to be poor. The great
diversity of American poverty undermines any glib generalizations
about lower class values in 1929.
Still, millions of poor Americans seemed to share certain
attitidues. Whether in 1900 or 1929, most did not perceive of
themselves as proletarians. Despite their trials, they still nourished
some hopes of success, however incremental, for themselves or their
children. Nor were most of them apathetic, docile members of a
culture of poverty. Many preserved meaning and dignity in their lives
and promoted order in their communities. Far from living for the
moment, those who could worked long and hard. When abused, they
were ready to strike or stage demonstrations.
82
Poverty Alleviation and Housing Problem
It may be that poor adults in 1930 shared more middle-class
aspirations of economic success than they had in 1900—that a
mainstream value system was developing. A smaller pecentage of the
whites were foreign-bom; a smaller percentage of blacks had grown
up in slavery. Improved communications by 1930 made many of the
needy a little less isolated than they had been and more aware of
what they were missing: Above all, economic growth was real, and it
inevitably led some of the poor to share in the improved standards of
living. Social scientists and social workers thought the poor needed
more, and they constructed slightly more generous budgets (in real
dollars) for poor families in the 1920s than they had in the 1890s.
The liberalization of such budgets over time, like the raising of the
poverty line, reflected the experts’ awareness that poor people
themselves expected a little more in 1929 than they had thirty and
fifty years before.
But everyday life taught the poor to expect only marginal gains
at best. Although they aspired to a better life, few thought they had a
right to a minimum standard of living—or even to charity. Before
1930 the notion rarely crossed their minds that government would
offer much help. As one poor person later observed, “Always going
to be more poor folks than them that ain’t poor, and I guess always
will be. I ain’t saying that’s the government’s fault. It’s just down
right truth, that’s all.” Above all, the poor were to deprived and
scattered to organize or to develop political power. Social workers
propagandizing for better welfare in the 1920s therefore found little
organized support for their cause from the poor, who coped as best
they could on their own. Until pressure groups of or for the poor
arose, there was little else the destiture could do.
5
War on Poverty
:
The rising expectations of Americans in the 1960s virtually ensured
that the rediscovery of poverty would have political repercussions.
The liberal, activist presidential adminstrations of John F. Kennedy
and Lyndon B. Johnson, who became personally engaged in the subject
of poverty, gave it a new visibility. The combination of rising
expectations and political involvement sparked significant
developments, including an unanticipated consequence: the arousal of
the poor themselves. The most immediate programmatic result,
however, was the war on poverty of 1964. Like many social welfare
proposals of the era, it aimed primarily at the age-old goal of
preventing poverty, but it diminished destitution only marginally. By
the time the war on poverty lost its political glamor, its limitations
had intensified the country’s doubts about the ability of experts to
diagnose, much less cure, the ills of the poor.
When Kennedy reached the White House in 1961, he had
already studied questions of social welfare. In 1958-1959 he had
supported a range of programmes for the poor—-Medicare, federal
aid to education, manpower training, and extension of public
assistance. During his campaign for the presidency, he had been
shaken by the misery he witnessed first hand in West Virginia. In
August of that year, speaking on the twenty-fifth anniversary of the
passage of Social Security, he praised the law for undertaking a
“war on poverty.” His inaugural address five months later referred
three times to poverty. “If the free society cannot help the many who
are poor,” he said, “it cannot save the few who are rich.”
Before 1963 Kennedy and his top advisers were concerned
mainly about sustaining economic growth and relieving
’-A
>/
Poverty7 Figures and the People of India
Jaya Mehta
respectively. The proportion of poor (poverty ratio)
for the year 73-74 was 54.1% for rural areas,
41.2% for urban areas and 51.5% for combined
rural and urban areas.
ext books in statistics often warn students,
“There are lies, damn lies and statistics.’’ If
an illustration was required, the official statistics
on poverty given in the Economic Survey 1995-96
would quite fit the bill. The Economic Survey tells
us that not only has the proportion of population
below the poverty line declined from 25.49% to
18.96%, era the absolute number of poor has
comedown from 201.41 million to 168.57 million
in 1993-94 as compared to the pre reform year of
87-88. This reduction is supposed to have taken
place both in the rural and the urban sector
T
The poverty lines for the subsequent years are
obtained by updating the 73-74 figures by National
Income private consumption deflator to account
for the price rise. The poverty' lines for the year
93-94 are Rs.229 and Rs.264 per capita per month
for rural and urban areas respectively.
However, Rs.229 and Rs.264 in 93-94, no longer
correspond to the expenditure norms corresponding
to 2400 K cal. apd-210()''K cal. as incorporated in
the definition of poverty line This is because the
consumption basket of all expenditure groups in
rural as well urban areas have changed over the
years. In particular, the expenditure has shifted in
favour of non-food items and within food items in
favour ofnon-cereal food. In all likelihood, there
is a shift towards non-food and non-cereal items
because social and physical infrastructure has so
changed as to require this shift. Moreover, the
relative prices of these items have increased more
than proportionately. For instance, the conditions
of housing and transport in urban areas have
deteriorated forcing people to live away from their
places of work and to spend on transport. Similarly,
the rural labour force has to migrate away from
their villages in order to get work. Loss of commons
have also made non-expenditure items into
expenditure items.
The poverty figures misrepresent reality on both
counts: the magnitude of poverty estimates as well
as the trends during the post-reform era. The official
claim that even the poor in the country- have
benefited during the reform period is completely
vacuous. As we shall see, the figures are created
in defiance of all logic and reasoning, ignoring even
the recommendations of official experts.
Definition of Poverty Line
he official poverty estimates are obtained from
the NSS consumer expenditure surveys
conducted quinquennialjy and now also annually
with a smaller sample size. The latest survey made
available to the Planning Commission is for the
year 1993-94.
T
The poverty line is defined as monthly per capita
expenditure of that expenditure group whose
expenditure on food enables the household to fulfil
minimum calorie requirements. The calorie
requirements are fixed at 2400 K cal. per capita
per day for rural areas and 2100 K cal. per capita
per day for urban areas. The “Task Force on
Projection of Minimum Needs and Effective
Consumption” (1979) fixed the poverty lines for
the year 1973-74 at Rs. 49.09 and Rs. 56.60 per
capita per month for rural and urban areas
Another possible reason for this shift is greater
exposure to and availability of non-cereal food and
non-food items, and the poorer strata, by choice,
have incorporated these items as necessary items
of their daily lives. To the extent there exists a
behavioural component in the definition of poverty
line (the actual expenditure of the concerned
expenditure group on non-food items and relative
Si
35
. J/7?6-9£
Poverty Figures and the People of India
consumption for cereal and non-cereal food), the
people by changing their consumption behaviour
have pushed the poverty line upwards.
Even if the poverty line is to be defined only as
minimum per capita expenditure that enables intake
of certain amount of calories, the poverty line in
1996 should be fixed afresh and not determined
by simply upgrading the 1973-74 poverty line
according to the price index.
NSS repons for 77-78 and 83-84 give per diem
calorie consumption for different expenditure
groups. If one directly fixes poverty lines from
calorie consumption data for 83-84, they turn out
to be much higher than the ones obtained by
upgrading the 73-74 poverty lines. The difference
in poverty lines with 73-74 base and 83-84 base is
noteworthy.
upwards just does not admit any explanation. It is
a deliberate attempt on pan of the government to
give unjustifiably low estimates and claim success
where it does not exist.
It so happens that the NSS aggregate private
consumption figures are less than the aggregate
private consumption determined independently in
the National Accounts System (NAS). The
Planning Commission follows the practice of
adjusttng the NSS data upwards for all expenditure
groups on a pro-rata basis, so that the aggregate
matches with the NAS figures. If the NAS figure
is 10 percent higher than the aggregate NS S figure,
then every expenditure group’s reported
consumption expenditure is increased by 10
percent.
“The Expert Group on Estimation of Proportion
and Number of Poor” appointed by the Planning
It is clear from the table that the poverty lines
Commission opinbd that this uniform adjustment
computed by the Planning Commission do not
is absurd. The discrepancy in NSS and NAS figures
conform to the official definition. The discrepancy
varies aerd'ss commodity groups. For instance, in
is too large to be ignored, and the poverty estimates
the casehf cereals - the main consumption items
of the poor, the NSS figures are, in
Table 1: Poverty lines for rural and urban areas
fact, higher than the NAS figures.
with different base years (in Rs. per capita per month)
NAS figures, on the other hand, are
higher for commodity groups mostly
Rural
Urban
belonging to the consumption basket
Base
Base
Base
Base
of the better off sections. If the NSS
73-74
83-84
73-74
83-84
data is to be adjusted, the process
would be complex and would require
73-74
49.09
56.64
comprehensive data analysis. It is,
83-84
101.70
122.61
117.35
138.53
therefore, best to leave the NSS data
86-87
122.26
147.39
141.07
166.53
unadjusted.
93-94
228.91
275.96
264.12
311.80
The Expert Group also recommended
Source: M.Phil dissertation of Shri Sunil Khafri.JIPA (1996)
that in order to obtain more realistic
state-wise estimates, poverty lines
thus obtained definitely underestimate the extent
should be computed for individual states according
of poverty.
to state level price indices.
Statistical Manipulation of NSS
Data and Decline in Poverty Figures
iile not computing the poverty line afresh
in 20 years can be explained away as part
of the general inertia of the government, especially
in matters concerning the underprivileged, the
official methodology of adjusting the NSS data
W
The Expert Group submitted its report in 1993.
The Planning Commission chose to reject both the
recommendations. It continues to adjust the NSS
data and now openly acknowledges the exercise.
In the meanwhile, the gap between NSS and NAS
data is widening at an increasing rate. In 1978-79,
the difference between the NAS and NSS estimate
was 5 percent, in 1993-94 it has increased to 39
Poverty Figures and the People of India
official claim of 19 percent. Now the IMF has also
disowned the government statistics. In the recent
IMF staff paper, the poverty ratio for the year 198889 is given as 35%, which matches with
S.P.Gupta’s estimates. Table -2 gives the official
estimates of poverty and Table - 3, the alternative
estimates.
percent. Whatever may be happening to poor
people’s expenditure levels in real life, in
government’s records they are being pulled up
(statistically) higher and higher. No wonder the
number and proportion of poor arc declining.
The Expert Group’s report and the NSS data are
fortunately accessible to all and individual
researchers have given alternative estimates for the
Misleading Reference Period
relevant period. In particular, the Expert Group
itself gave poverty estimates for the years 1987' J 'he Economic Survey 1995-96 gives the
88. The poverty ratio was 39.1% for rural, 40.1%
poverty'figures for 1987-88 and 1993-94(one
for urban and 39.3% for the
country. These figures are
Table 3: Percentage of Population below Poverty Line
significantly higher than the
official figures.
1
87-88
88-89
89-90
90-91
July-Dec.
Jan.-Dec.
1991
1992
1993-94
^^>r the post reform years,
estimates are given by Suresh
Rural
41.72 .
39.1 39.2 33.7 35.0
40.0
37.52
Tendulkar and L.R. Jain
37.6 -r' i, 37.74
Urban
40.1 38.4 36.0 37.0
(Economic & Political
Combined 39.3 39.0 34.3 35.5
394.0 ■40.69
Weekly, 10th June 1995) S.P.
Gupta (mimeo, 1994) and
7
Source: 1) S.P. Gupta: ‘‘Recent Economic Reformsrand their impact on the Poor and
Abhijit Sen and C.P.
Vulnerable Sections of Society’ mimeo. 1994
Chandrashekhar (Business
2) Abhijit Sen and C.P. Chandrashekhar, Business Line, 23rd January' 1996
Line, 23 Jan. 1996). Abhijit
Sen and C. P. Chandra
shekhar have given detai led state wise rural poverty
pre reform year and one post reform year) in order
estimates from 1973-74 to 1993-94. According to
to support the claim that poverty has declined in
all three, poverty ratio in the post reform period is
the post reform years. Tnese reference points are
in the range of 40 percent and nowhere near the
clearly misleading.
Table 2 : Number and Percentage of Population
below the Poverty line All India (nos. in million)
1987
(Revised)
1993-94
(Preliminary)
Rural
Number of Poor
% age ofPoor
,168.30
• 28.37
141.05
21.68
Urban
Number of poor
% age of poor
33.11
16.82
27.52
11-65
Combined
Number of poor
% age of poor
201.41
25.49
168 57
18.96
j
Source: Economic Survey 1995-96
37
The NSS surveys are also available for the year
1988-89, 1989-90,1990-91, July-Dec. 1991 and
Jan.-Dec. 1992. And the trend of poverty figures
in these intervening years must necessarily be
noted. 1987-88 happened to be a drought year,
when poverty figures were naturally much higher
than in other years. In fact, from 1987-88 to
1990-91, the year before the reform, poverty
ratio declined from 39.3% to 35.5%. In the post
reform era, the poverty estimates rose
considerably (Table 3). The poverty ratio in 1992
became 40.69%. In 1993-94 poverty declined
and the rural poverty ratio is slightly lower than
that for 1987-88 (37.52% as compared to
39.18%). But, contrary to the government’s
claim, Abhijit Sen and C.P. Chandrashekhar find
Poverty Figures and the People of India
that in absolute numbers, the rural poverty figures
arvhidierin 1993-94 (244.87 million) than in 198788 (229.83 million).
The government conveniently refuses to respond
to the poverty figures in the intervening years by
insisting that sample size for these annual surveys
is too small and that estimates based on these thin
samples are not admissible. Abhijit Sen and C.P.
Chandrashekhar have pointed out that, so long as
samples are drawn in a proper random fashion from
a population, the sample estimates are unbiased
estimates of the population parameters irrespective
of the size of the sample. The only disadvantage is
that estimates derived from smaller samples have
a larger variance. They have shown that even after
taking the larger variance into account, it can be
established quite unambiguously that poverty
increased in the immediate post reform period.
The declining trend of poverty existed only in the
pre-reform period, not in the post-reform period.
After an initial rise, the dip in 1993-94 is most likely
a local phenomenon and not indicative of a trend
as such. The poverty ratio max' start rising again
from 1994-95. In fact, available subsidiary evidence
does indicate such a possibility.
The percentage of the population belonging to the
poverty group depends to a very' large extent on
food prices, or more precisely, the Consumer Price
Index for Agricultural Labour (CP1-AL) in rural
areas. The agricultural wages or the incomes of
others belonging to the poverty group are normally
not linked to the price index. Therefore, when the
price index goes up, corresponding real incomes
decline and larger and larger number of households
fall into the poverty group.
AL increased only moderately and it is this reversal
of trend in CPI-AL, which is mainly responsible
for the decline in poverty' figures for the year 199394. However, throughout 1994-95 and 1995-96,
the CPI-AL has increased at a rate of 10 percent
or more and we may expect the poverty ratio to
start increasing once again.
This temporary break in the rising CPI-AL and
the slight decline in poverty ration in 1993-94 can
also be explained in terms political economy of
Structural Adjustment Programme (SAP). SAP is
geared towards concentrating the surplus with a
small elite, which can facilitate its transfer from
the domestic economy to the metropolitan centre.
Therefore, various policies are geared towards
transferring the surplus from all sections of the
population to the top elite.
At the very start of the post reform period, food
prices werdraised by increasing the procurement
and PDfi-pfices. The unprecedented rise in CPIAL facilitated extraction of surplus from the bottom
mqstzstrata. This process had to be eventually
halted. First of all because there was not so much
surplus available with the poorest people. Further,
• electoral compulsions ensured that every State
Government and then the Central Government
talked of the ‘"have nots” and gave them marginal
concessions.
People oflndia Beyond
the Poverty Figures
t is very unfortunate that- the debate oil poverty
has been centred around the controversy oyer
the poverty line and the corresponding head count
ratio. As a result, very little attention is paid to the
relative deprivation among different sections within
the 40 percent poverty' group population. At the
same time deprivation and marginalization of
different sections above the poverty line seems to
be no one’s concern.
I
In the immediate post-reform period, i.e., from
Aug. 91 till Aug. 92, the CPI-AL increased at a
rate of 20 percent or more. The incomes of poor
people in rural areas could not keep pace with this
inflation rate. The agricultural wages declined in
real terms and the rural poverty ratio increased from
35.0percentin 1990-91 to41.72 percent in 1992.
How Poor are the Poor
From Jan. 1993, the increase in CPI-AL was almost
halted and it registered a negative growth from April
1993 till Aug. 1993. Throughout 1993, the CPI-
rof. Amartya Sen pointed out long ago that
the head count ratio is a most inadequate
38
P
Poverty Figures and the People of India
A
i
[>
I
f
'1
?
)
0
measure of poverty. It is possible to visualise a
situation where income is transferred from the
lowest strata to those at the threshold. The head
count povertv ratio will improve, but such a transfer
cannot be condoned in any civilised society. It is.
therefore, necessary to take into account how far
off various sections are from the poverty line and
take cognisance of relatively greater or less
deprivation. For the post reform period, Suresh
Tendulkar and L R Jain {Economic & Political
Weekly, 10th June 1995) have computed measures
related to the income gap and the severity of
poverty. They find that worsening of rural poverty
in 1991 and 1992 is much higher when we consider
severity measure as compared to head count ratio.
In other words within the poverty group population.
the decline in per capita expenditure for the lowest
strata was relatively higher.
for the year 1992, only 11.4 percent of population
belongs to this highest expenditure group.
Incidentally, the per capita per month Net National
Income for 1992-93. which in itself is extremely
low by international standards is Rs. 521. This is
much higher than the cut off point for the highest
expenditure group. Hence, 90 percent of the rural
population live at monthly expenditure levels far
below the national per capita income. Similarly, in
urban areas, 79 percent of the population live below
this level.
The figures for the head count poverty ratio do
not say anything for these 50 percent, who are not
classified as poor. If one makes the assumption
that poverty figures arc reflecting the general trickledown effect, then perhaps one can say that
improvement in poverty ratio represents general
prosperity for all and its worsening represents
declining incomes foral^. Such an assumption is
absurd. In the Structural Adjustment Programme,
tiie rate of surplus extraction from different sections
would naturall/Vary. The decline in poverty ratio
m 1993-94 or the feet that surplus extraction from
the poorest strata was temporarily halted, does not
imply that this was the case for the rest 50 percent
also.
These findings will not surprise anyone. Apart from
the fact that CP1-AL increased exorbitantly, the
employment opportunities in the rural sector.
especially those created by the Government
declined in the initial years. Person-days of
employment generated under Jawahar Rozgar
Yojna declined from 874.6 million in 1990-91 to
809.2 million in 1991-92 and further to 782.1
million in 1992-93. Especially tribals and some
others have lost there traditional means of livelihood
and are unable to find any alternate. Starvation
deaths are reported from Dhulia and Ratnagiri
districts in Maharashtra and Kalahandi in Orissa
even in 1994-95.
A brief overview of the impact of New Economic
Policy on urban and rural sectors suggests that there
is an unambiguous dichotomising of the Indian
economy, not along rural-urban divide but between
a modern, prosperous sector and the rest
(impoverished sector) both in agriculture as well
as industry. And transfer of surplus from latter to
the former is continuing unabated.
Poverty among others
Urban Divide: the Modern Sector
and the Subsistence Sector
he poverty line is fixed at such a low level that
crossing the poverty' line by no means ensures
dignified living conditions for a household. If right
to life is to be interpreted as right to a dignified life,
then 90 percent or more of the households would
be classified as being deprived of this right.
T
ndustrial restructuring that took place during the
1980s entailed the pruning of organised work
force. Reforms in the 1990s, particularly in the
public sector, have further reinforced this trend.
According to the Annual Survey of Industry' census
of all registered units employing 100 or more labour,
the employment in 1993-94 increased only bv 1
percent. Moreover employment in public sector
units has shrunk by 0.88 percent during 1990-95.
I
TheNSS classifies households spending Rs. 385
per capita per month as the highest expenditure
group for rural areas. This amounts to less than Rs
2,000 as monthly expenditure for a household of
five. According to the 48th round, i.e., NSS data
J
39
Poverty Figures and the People of India
The organised work force or potential organised
work force is being pushed into informal sector in
two specific ways:
mines work on stagnant wages. In 1994, the real
wages of textile workers in almost all major centres
were 90 percent of their 1990 level. Further, once
retrenched, they hardly retain any linkages with
the organised sector.
(1) The traditional manufacturing units, which still
employ the bulk of the organised labour like textile,
sugar processing, etc., are perpetually sick and are
increasingly resorting to closures, lock-outs and
modernisation. The work force retrenched thus, is
unable to find alternative employment and is forced
to join the informal sector at a low subsistence level.
National Textile Corporation has at the moment
42 ailing units (acquired by the government to bail
out industrialists) with 65,000 workers facing a
bleak future. Unable to find alternative employment
and unable to face starvation for themselves and
their families, 22 workers from Jiyajee Rao Cotton
Mill Gwalior committed suicide in 1995.
Similarly, the urban informal sector, which is
bursting at its seams, is not an amorphous lot. Apart
from those who are involved in petty' trade or other
activities ensuring a "quick buck", there are informal
enterprises with forward linkages to the modem
sector. These constitute the dynamic part of the
informal sector. Although the organised sector has
substantially increased informalisation ofjobs, this
workforce is still only a small part of the informal
sector. The larger constituent comprises of informal
enterprises, providing goods and services for the
low income consumer market. This sub-economy,
which operates with low income consumers and
low' income producers, has weak linkages with the
modem sector ,and has very little possibilitv of
benefiting'Trom its growth and dynamism.
(2) The other case is that of modem viable units
which want to reduce the number of permanent
workers and dependence on trade union
cooperation. These units are resorting to down
sizing, multi-site location and greater automation.
Casualisation is increased by farming out activities
to contract labour and ancillaries. Otis, for instance,
first made its permanent employees redundant and
then subcontracted maintenance jobs to these very’
ex-employees. Tefco (Eveready) reduced its
permanent workforce from 3,000 to less than 900
and subcontracted significant work outside. Bajaj
Auto earned international recognition for its
performance, increased production to 33 percent
over its installed capacity and at the same time
reduced its workforce by 25-30 percent. The
workforce, casualised in this manner, sometimes
continues to maintain its linkages with the modem
sector.
Unfortunately, a part of this sub-economy is
trapped ihto backward linkages with the modem
sector. It absorbs the discarded material of the
modem sector like scrap metal or plastic containers
in the name of recycling. The import of hazardous
waste from the developed world to the developing
world has become an issue for worldwide protest.
Surplus transfer from the subsistence and lowincome sector to the modem sector has been
accompanied by continuous rise in the administered
prices of essential commodities and withdrawal of
subsidy from health, education and transport
services.
Integration of the Rural Economy
into the World market
Thus, apart from those in managerial cadre or in
highly paid professional jobs, the rest of the
organised workforce is constantly threatened with
job insecurity. However, there is a difference
between those working in modem viable units and
those in traditional sick ones. The workers in the
modem sector work with high productivity norms
are also reasonably well paid, notwithstanding the
job insecurity. The workers in textile units or coal
he division of society into a minuscule, small
sector, which gains from the New Economic
Policy, and the rest, which loses, can be discerned
in the emerging rural scenario as well. Like the
Newly Industrialised Countries (NICS), a few
developing countries in the International Markets
are emerging as Newly Agricultural Countries
(NACS) and India is one of them.
T
40
Poverty Figures and the People of India
marginal farmers have joined the class of landless
labourers and a number of medium farmers have
sold off part of their land and joined the category
of small farmers. Agrarian production is thus
tending to crystallise in two distinct groups - one
of small farms just viable to fulfil the family
subsistence and the other of large farms, where
corporate sector can find space, where commercial
fanning can be undertaken, where heavy capital
investment is possible and where surplus can be
concentrated and integration with the metropolitan
centre can be realised.
The NACS are supposed to export cut flowers,
fruits and other exotic agricultural products to the
developed countries and, in turn, import of food
grains. International marketing under the New
Economic Policy thus requires a shift in the land
use pattern in favour ofhorticulture and floriculture
and other cash crops. Since the ownership pattern
of land directly influences it use, a change in the
ownership pattern is an essential prerequisite for
changing the use pattern. Withdrawal of various
input subsidies by the government, removal of land
ceiling and entry of corporate sector in agriculture
are moves towards facilitating this change.
In short, Modem India, which is emerging in the
1990s as a powerful elephant, awakened at last,
does not even distantly represent the people of
India. Poverty figures may decline or increase
marginally, but the people at large are getting
distinctly disintegrated from the modem globalised
India through a deliberate process.
A small study in Meerut district and sale of land
confirms the hypothesis of changing land^kership patterns (Indian Journal ofAgricultural
Economics July-Sept. 1995). After the land market
operations, the number of marginal farmers and
medium farmers have gone down and that of small
farmers and large farmers have gone up. The
'’X
Prosperous India of 1995 !
>-
■ Deaths due to starvation oftribal children near Amravati district-in Maharashtra is said to number
around 500. The official figure initially was 239. Later when a high level meeting was to be held to
discuss the issue, the figure was.brought down to 135. Such high incidence of death is attributed to
two factors : i) the region is inaccessible and help cannot reach in ,time and ii) underaged and
undernourished mothers give birth to low weight children with slim survival chances. A girl of
sixteen was found to be a mother of five children.
■ In the tribal village Khadki of Dhule district in Maharashtra 13 children died of chronic malnutrition.
In Akruni, Akkalkuwa and Dhadgaon endemic hunger and malnourishment claimed the lives of 20
h children. Every third child exhibits chronic symptoms of malnutrition. In their w'eakened state, they
fell easy prey to infectious diseases. An outbreak of measles claimed many lives.
■ In 1995, with poor rains in Maharashtra more than 10,000 villages and a equal number of hamlets
struggled for drinking water. The same regions, districts and villages face acute drinking water
shortage every time. Do we only blame the monsoons?
■ Hunger deaths once again recurred in poverty stricken Koraput district with 36 adivasis dying within
a span of 20 days. Koraput district is in the neighbourhood of (in)famous Kalahandi. Total failure of
PDS and no employment forced tribals to survive on mango kernel juice and tamarind seeds crushed
ymtoapulp.
® Poverty and hunger in Kalahandi was brought into the limelight several years ago. Despite crores of
rupees spent on relief and development in this rice surplus region, people still survive on Halkanda.
Halkanda must be swallowed without contact with the tongue, since its bitterness induces vomiting.
41
Poverty Figures and the People of India
Hotels Revel in the Luxury of High Profits
For the Indian hotel industry the going could not have been better. The joy-ride which began last year appears
to be continuing if the first half results are any indication. High occupancy rates, increased tariff rates and
growing margins have set the platform for a better performance in the second half of the current financial
year.
The financial year 1995 saw sales in the industry rise by 37 per cent and a growth of 22.87 per cent
in the net profit of the industry. The first half of the current year appears to be even better, going by results
of the major players in the hotel industry.
Indian Hotels company Limited, the largest hotel chain in India with 4,500 rooms in 40 properties,
registered a 119 per cent rise in net profit and a 103 percent rise in operating profit in the first half of the
current year over the corresponding period in the previous year . Similarly, East India Hotels, with 25500
rooms in 14 hotels, registered a 46.9 percent rise in sales in the first half. The net profit of the company
increased by a whopping 92.4 percent during the same period.
Liberalization and the growth in business travellers apart, the slide in the forex value of rupee has
given a further boost to the Indian hotel industry. The massive depreciation in the value of the rupee in the
last six months have substantially boosted the profit margins of the hotel industry. The recent hike in the
room rents of the five star hotels in the country by 25 percent have also added to the profits of die compa
nies. The hotel prices in the country are now comparable with prices world-wide.
Asian Hotels Ltd. (AHL) for instance earns 70 percent of its income from foreign exchange . “The
sharp devaluation has boosted the bottom line. The deference trill sjiow orf our balance sheet”, claims Sushil
Gupta of AHL. Gupta runs the Grand Hyatt at New Delhi.
Hotel Leelaventure registered a 100 per cent rise in its net profit in the first half. Other hotel chains
have also seen the boom boosting their profit margins. ITG Hotels Limited, which has 14 properties and
2500 rooms, registered a 89.5 percent rise in the sales and the net profit of the company rose by 54.3 per
cent in the first half of the current year . Oriental Hotels saw a 380 per cent jump in profits from Rs. 1.3
crore to Rs 6.24 crore during the same period. Bharat Hotels witnessed a rise of 49.9 percent in its net
profit in the first half - clearly, economic liberalisation has had an impact. “The international business trav
eller is increasingly stalking the Indian markets for opportunities and this has sent hotel occupancy rates to
high levels” says Gupta.
Earlier, the hotel industry used to go through seasonal booms keeping time with the tourist season.
But with the avalanche of business travellers, the situation is different today. Hotels are booked right
through summer. A large number of Industries are reeling under the double blow of liquidity crunch and
forex crisis. But the hotel industry is booming.
Thriving Hotels at a Glance (figs, in Rs.crore)
East India Hotels LtdOriental Hotels Ltd.
Indian Hotels Ltd.
Oberoi Associated Hotels Ltd
Sterling Holiday Resorts(I) Ltd.
Hotel Leelaventure
Bharat Hotels Ltd.
ITC Hotels Ltd.
IGGI Resort Inil. Ltd.
Palace Heights Hotels Ltd.
Cavelong Beach Hotel.(India)Ltd
Savera Hotels Ltd
Total sales
Sept. 95
Net profits ...
Sept.95 ■
. Net profits
Total sales :
Sept.94
, .Sept.94
16452
28.50
—
8.83
4897
—,
29.95
50.94
16.12
5.06
5.12
5.64
39.90
624
4430
2.11
1037
1620
14.77
4.23
4.65
1.06
0.53
1.75
11226
21.10
15606
637
19.60
3551
2521
26.88
4.82
4.08
3.41
434 .
Courtesy Vineet Narang in the Financial Express, 2.2.96.
42
20.73
130
20.20
059
638
8.06
9.98
2.74
2.48
0.86
036
0.87
%.increase
; in profit
92.47
380.00
11931
113.13
62.54
100.99
48.00
5438
8730
23.26
47.22
101.15
Co m >_( - >o
Minis
1
SOCIAL SECTORS
Growth with social justice and alleviation of
poverty have been primary objectives of Indian
otaining since its inception in 1951. Several anti[Werty measures also have been in operation
for decades focussing on the poor as the target
groups. These include programmes for the
welfare of weaker sections, women and children,
and a number of special employment
programmes for self and wage employment in
rural and urban areas.
2. The government has relied mainly on three
approaches for reduction of poverty and
unemployment: the first entails pursuit of higher
economic growth which will improve the levels
of living of all groups of people in the society
including the poor; the second involves direct
anti-poverty and employment programmes; and
the third has stressed high priority to government
expenditure on social sectors. The reforms
underway since the economic crisis of 1991 have
sought to strengthen these approaches.
TABLE 10.1
Central Government Expenditure (Plan and Non-Plan) on Social Services
Item
1990-91 1991-92 1992-93
1993-94
1994-95
1995-96
1996-97
(Rs. crore)
1997-98 1998-99
(BE)
(RE)
1. Social Services
5380
a. Education, Art & Culture and
Youth Affairs
1686
b. Health and Family Welfare
1273
c
Water supply. Sanitation.
Housing and Urban Development 828
d. Information and Broadcasting
436
e Welfare of SC / ST and other
Backward classes
348
f. Labour, Employment and
Labour Welfare
289
g. Social Welfare & Nutrition
520
5892
6397
8150
9223
11631
13659
16520
21159
1755
1382
1878
1722
2378
2148
2799
2413
3630
2542
3988
2751
5134
3369
6535
4366
934
417
788
371
1262
392
1351
479
1756
596
2957
593
3449
896
4495
923
419
488
564
744
800
833
728
1101
357
628
347
803
440
997
507
1800
587
1950
651
2293
831
2908
2678
2283
3211
526
880
4680
5803
6609
5081
5321
5890
2466
2873
3760
2. Rural Development
3. Basic Minimum Services (BMS)*
including Slum development
4. Social Services, Rural
Development and Basic
Minimum Services (1+2+3)
5. Total Central Government
Expenditure as % of GDP
at current market prices
8058
8175
9608
12830
15026
18240
21206
24714
30809
18.1
16.6
16.0
16.2
15.5
14.6
14.3
15.0
15.1
6. Social Services, Rural
Development and Basic
Minimum Services as %
11.5
10.2
10.5
7.8
9.0
9.3
10.5
of Total Expenditure
7.7
7.3
7. Social Services, Rural
Development and Basic
1.7
1.4
1.5
1.5
1.3
1.5
1.6
Minimum Services as % of
1.4
1.2
GDP at current market pricesS______________________________________________________________________________________ ~
Note : Figures for the years 1990-91 to 1996-97 are actuals,
* : Came Into operation from 1996-97.
$ : The ratios to GDP are based cn new series of National Account Statistics with 1993-94 as base year released by the Central Statistical
Organisation (CSO) on February 3. 1999. For the purpose of comparability, GDP at current market prices for the years 1990-91,
1991-92 and 1992-93 have been interpolated by using an average link factor of 1.0878 obtained from the overlapping years viz.
1993-94,1994-95,1995-96 and 1996-97 for which both the old series and new series for the GDP at current market prices are available.
Source : Budget Papers._
4119/F—ll-B
EC
of
a)
b)
2 HE
3 FA.
4 WC
of
Intc
Ser
5
WE
6
RU!
RUE
POX
of
a) u
b) E
c) N
P
d) Ir
P
R
e) R:
S.
I) lr
g) k
7 OTHE
a) N(
b) Sc
Ec
Yo
c) Pn
Yo
d) Sv.
Ro
(A) Total
Scher
(1 to
(B) Total
(C) A as
Total i
(D) A as
at cur.
©
$
.
@@
i
Source : Bi
TABLE 10.2
Central Plan Outlay for Major Schemes of Social Sectors and Rural Development
(Rs. crore)
Minlstry/Department/Scheme
(RE)
(BE)
(RE)
(BE)
(RE)
(BE)
865
837
1825
2504
3388
2574
4095
3350
4245
265
96
224
131
651
234
1443
170
2264
225
1567
1 12
2542
127
2265
81
2779
94
4
275
675
WOMEN AND CHILD DEVELOPMENT 330
of which
Integrated Child Development
Services
268
255
785
313
670
1581
730
649
1506
821
815
1535
847
818
1547
847
955
1829
900
918
1829
1026
1195
2489
1226
255
588
669
682
682
734
600
603
5
WELFARE
364
366
890
890
890
890
1389
804
1539
6
RURAL DEVELOPMENT AND
RURAL EMPLOYMENT &
3130
2975
7700
8248
8632
7775
9001
8290
9811
POVERTY ALLEVIATION
of which
a) Jawahar Rozgar Yojana (JRY).
2100
2001
3862
2955
1865
1655
2078
1953
2095
1570
1816
1970
1840
1970
1905
1990
550
932
550
700
490
700
656
646
61 1
552
800
6535
4366
3449
896
4495
923
1101
65™ "
5321
831
2908
5890
2873
3760
2293
24714
15.0
10.5
30809
15.1_
11.5
1.6
,e Central Statistical
• the years 1990-9J,
erlapping years v.xprices are available.
4119/F— lb®
HEALTH INCLUDING I. S. M. & H.
FAMILY WELFARE
Scheme (EAS)'
c) National Social Assistance
Programme*
d) Integrated Rural Development
Programme including
Rural Artisans
e) Rural Water Supply and
Sanitation
7
728
EDUCATION
of which
a) Elementary Education
b) Adult Education
b) Employment Assurance
(Rs. Crore)
5134
3369
1998-99
(BE)
997-98 1998-99
(BE)
(RE)
21159
1997-98
(RE)
2
3
16520
1996-97
1995-96
(BE)
1
inly on three
joverty and
suit of higher
ve the levels
n th^pciety
ivolv^r direct
rammes; and
o government
The reforms
of 1991 have
laches.
1990-91
377
356
656@
656
443
421
1170
1170
1170
1155
1402
492
1194
1194
1190
1402
1144
1727
f) Indira Awas‘Yojana ++
g) Million Wells Scheme ++
211
448
388
448
373
450
71
68
71
50
80
31
145
145
145
115
145
95
110
103
189
OTHER PROGRAMMES
a) Nehru Rozgar Yojana (NRY).
120
1 10
57
53
1600
b) Scheme for Sell Employment for
Educated Unemployed
Youth (SEEUY).S
c) Prime Minister's Rozgar
Yojana (PMRY).
d) Swarna Jayanti Shahari
Rojgar Yojana (SJSRY)@@
(A) Total Central Plan outlay on Major
Schemes on Social Sectors
5816
(1 10 7)
(B) Total Plan Expenditure
30466
(C) A as percentage of
Total Plan Expenditure
19.1
(D) A as Percentage of GDP
at current market pricesSS
•
+
@
++
1.0
5694
13612
14831
16323
14616
18394
16446
20804
29956
48500
48684
54685
54894
62852
60630
72002
19.0
28.1
30.5
29.8
26.6
29.3
27.1
28.9
1.0
1.1
1.2
1.2
1.0
1.2
1.1
1.2
Came into operation on October 2, 1993.
The scheme was announced on 15th August 1995, Rs. 550 Crore was provided at RE stage.
BE (Rs 640 crore) was revised upward within total BE for the Deptt. of Rural Development.
The Indira Awas Yojana (IAY) and the Million Wells Scheme (MWS) were earlier the sub schemes of JRY. From 1.1.1996 they
have become separate schemes.
$ Integrated with PMRY.
@@ Is a rationalised version of the erstwhile schemes'of Urban Basic Services, NRY and PM's Integrated Urban Poverty
Eradication Programme.
S$ : The ratios to GDP are based on new series of National Account Statistics with 1993-94 as base year released by the Central
Statistical Organisation (CSO) on February 3, 1999. For the purpose of comparability, GDP at current market prices for 199091 has been interpolated by using an average link factor of 1.0878 obtained from the overlapping years viz. 1993-94, 1994-95,
1995-96 and 1996-97 for which both the old series and new series for the GDP at current market prices are available.
Source : Budget Papers.
144
3. The Central government expenditure on
social sectors (comprising education, health &
family welfare, water supply, sanitation, housing,
social welfare, nutrition, rural employment and
minimum basic services) as a ratio to total
expenditure increased from 7.7 per cent in 199091 to 10.5 per cent in 1997-98 (RE) and further
to 11.5 per cent in 1998-99 (BE). As a ratio to
the GDP at current market prices, the central
government expenditure on social services
increased from 1.4 per cent in 1990-91 to 1.6
per cent in 1997-98 (RE) and further to 1.7 per
cent in 1998-99 (BE) (Table 10.1).
4. The Central plan outlay on major schemes
on Social Sectors as a percentage to the GDP
current market prices increased from 1.0 per
it in 1990-91 to 1.2 per cent in 1998-99(BE)
(Table 10.2). The central outlay for Welfare of
Weaker Sections increased by 91.4 per cent in
1998-99(BE) over 1997-98(RE), Family Welfare
by 36.1 per cent, Health by 30.2 per cent and
Education by 26.7 per cent.
«
5. Increased availability of health care and
family welfare services have resulted in reduction
of all India death rate, birth rate and infant
mortality rate. The crude death rate declined
from 14.9 per thousand in 1971 to 9.8 in 1991
and further to 8.9 in 1997. Similarly, the infant
mortality rate per thousand declined from 129
in 1971 to 80 in 1991 and further to 71 in 1997.
The birth rate per thousand also declined from
36.9 in 1971 to 29.5 in 1991 and further to 27.2
in 1997 (Table 10.3). These tentative trends
consistent with the view that rapid
TABLE 10.3
Basic Indicators of Human Development
Literacy
rate
(per
cent)
Birth
rate
32.1
18.3
39.9
27 4
146
41 3
28.3
41.7
22.8
146
45 6
34.5
36.9
14.9
129
50 4
43.6
33.9
12.5
110
1991
59 4
52 2
29 5
9.8
80
1996
62 4
NA
27.5
9.0
72
1997
NA
62’
27.2
8.9
71
Year
Life expec
tancy at
birth
(years)
1951
1961
1971
1981
Death
rate
infant
mortality
rate
(per thousand)
Source :
Registrar General and Census Commissioner
of India.
* As per NSSO.
economic growth has brought about an
improvement in living standards of people in
general.
6. However, there are wide inter-state variations
in indicators of human development. For
instance, in Kerala the life expectancy at birth at
72 years and overall literacy at 90 are
significantly higher than those in states like Bihar,
Madhya Pradesh, Orissa, Rajasthan and Uttar
Pradesh where concerted efforts are required
to improve overall quality of life. In fact the
indicators of human development in Kerala are
comparable with several Asian developing
countries like China, Malaysia, Indonesia,
Thailand and Sri Lanka which have made
significant progress in human development over
the years (Table 10.4).
7. Average
labour, whic
agricultural
in the crisis
July to Jun
increased ir
95 (Table 1(
trends acre
conditions
agriculture
Annuc
State
Andhra Pra
Assam
Bihar
Gujarat
Karnataka
Kerala
Madhya Pr.
Mahararshtr.
Orissa
Punjab
Rajasthan
Tamil Nadu
TABLE 10.4
Uttar Pradr
Indicators of Human Development for Some Asian Countries
Country
West Beng
Life
Expectancy
at birth
(Years)
1995
Infant Mortality
rate (Per
thousand
births)
1996
India
62.4
72
52
Kerala State (India)
72.0
13
90
China
69.2
38
82
Indonesia
64.0
47
84
Korea, Republic
71.7
6
98
Malaysia
71.4
11
84
Philippines
67.4
32
95
Thailand
69.5
31
94
Adult
Literacy rate
(Per cent)
1995
All India
(P) : Provi
Notes : (i)
(»)
(iii)
Source: UNDP - Human Development Report, 1998.
For India, estimates are from Registrar General & Census Commissioner of India & relate to the year 1996 (P).
Source: M
145
7. Average real wages for unskilled agricultural
labour, which reflect the economic conditions of
it
agricultural labourers, declined by 6.2 per cent
,-iiant in the crisis year of 1991-92 (agriculture year
July to June) for the country as a whole, but
increased in subsequent years except in 199495 (Table 10.5). However, there were no uniform
1
trends across the states implying that local
129
conditions exert
agriculture wages.
significant
on
influence
Poverty
8. Together with the overall economic growth,
the anti-poverty and employment generation
programmes have helped in reducing the
incidence of poverty over the long run. The
poverty ratio declined from 55.4 per cent in
1973-74 to 37.3 in 1993-94 in rural areas and
from 49.0 per cent in 1973-74 to 32.4 per cent
in 1993-94 in urban areas. For the country as a
whole, the poverty ratio declined from 54.9 per
80
72
71
TABLE 10.5
lloner
Annual Percentage Change in Real Wages for Unskilled Agricultural Labour for Selected States
a
le i
Percentage Change for
agricultural year (July to June) over previous year
It
^kte
1991-92
Andhra Pradesh
ition
Fc
th
ar
1994-95
1995-96
1996-97(P)
1992-93
1993-94
(•) 1 1.40
W
1.57
(+)
8 60
(+)
2.71
(■)
1.73
(+)
1.51
(+)
1.40
(+)
0.58
(-)
6 58
1997-98(P)
Assam
(-)
8.73
(■)
1 67
(+)
2.68
(+)
2.95
(+)
0.93
Bihar
(-)
4.39
(-)
5.00
(+)
5 98
(+)
1.69
(-)
2.30
(-)
2 79
(-)
0 79
Gujarat
(-)
4.31
(+)
7.92
(+)
2 86
(+)
1 27
w
2.92
(+)
5.08
(+)
14.52
UttS
Karnataka
(-) 13.25
(+) 41 31
(-)
15.60
(-)
8.61
(+)
21.48
(+)
15 22
wire
Kerala
tiha
(-) 14.39
(+)
4 07
(+)
9.74
(■)
2.84
(+)
5.24
(+)
13.20
(+)
14.60
(+)
15.34
i a
• pin Maharashtra
esu
. Orissa
nad
(•)
3.89
(+) 12.57
(-)
3.53
(+)
4.93
(+)
1.24
(+)
1.31
(+)
0.96
(+) 25.58
(-)
0.68
(■)
7 89
(-)
7.98
(+)
31.73
(-)
3.89
(+) 11.03
(■)
0.14
(-)
3.52
(+)
0.55
(■)
0.27
(+)
2.56
OV(
Punjab
(+)
3.65
(+)
4.25
(+)
151
(-)
1.17
(-)
6.50
(-)
0 42
(-)
3.35
Rajasthan
3.56
(-)
7.66
»
th
Madhya Pradesh
(-) 14.79
(+)
0.66
(+)
6.12
(■)
laul Nadu
(-)
4.85
(+) 13.29
Uttar Pradesh
(+)
1.02
(+)
7.56
West Bengal
(-)
6.25
’ (-)
6.19
(+)
(«■)
1.05
(+)
10.33
(+)
17.81
(«•)
'3.78
(+) 11 60
w
1.03
(+)
3.63
(+)
28.05
(■)
16.67
(■)
6 77
(-)
2.31
(+)
14.78
(-)
6.37
(+)
18.29
(+) 24.39
(-)
6.50
(■)
5.29
(■)
0.28
(+)
10.21
(-)
5.16
5.21
(+)
5.61
(-)
0.39
(+)
0.72
(+)
4.67
w
4.88
It
te
It)
All India
)5
Notes : (i)
Data on state average wage rates for unskilled agricultural labour in current prices are taken
from Ministry of Agriculture. The same have been converted into real wages by deflating with the State level
Consumer Price ndex Numbers for Agricultural Labourers (CPIAL with 1960-61 as base. (CPIAL has been
sourced from Labour Bureau, Shimla). Having estimated real wages for agricultural year percentage change
over previous year has been worked out.
(ii)
New series of CPIAL with base 1986-87 = 100 were released w.e.f Nov. 1995. To maintain continuity of old
series of CPIAL, the new series have been converted by using the linking factor of each State and then, the
average fo each State has bee worked out on the basis of converted series.
(iii)
The real wages for unskilled agricultural labour for each State have been weighted by total agricultural labourers
of the State for working out alh India average. The weighted average real wages for all India are based on 14
States as reported above. Having estimated weighted average real wages for all India, percentage change over
previous year has been worked out.
(P) : Provisional.
>2
)0
12
14
^8
34
15
34
Source: Ministries of Agriculture and Labour.
146
cent in 1973-74 to 36 per cent in 1993-94 (Table
10.6). Large Sample surveys on common
expenditure on the basis of which poverty ratios
are estimated are not available in subsequent
years.
9. Although reduction of the overall poverty
ratio in India from 55 per cent to 36 per cent
during a period of two decades is significant,
India’s performance in poverty reduction has
been weak as compared with some of the East
Asian countries. It may be observed from Table
10.7 that the success of some of the East Asian
countries (like China and Indonesia) lies in
faster economic growth. In general, the faster
the rate of overall growth, the faster is the rate
of poverty reduction. It is, therefore, reasonable
to expect that a sustained and long lasting
solution to the problem of poverty depends on
creation of opportunities for broad based
economic development and higher growth.
Employment
10. It may be observed from Table 10.8 that the
average annual growth rate of overall
employment (in both organised and unorganised
sectors) declined continuously from 2.75 per cent
in the period 1972-1978 to 1.77 per cent in 19831988, but increased to 2.37 per cent in 1987-
TABLE 10.6
Number and Percentage of Population Below Poverty Line
"
1994. Hov
sector emf
even durir
94. There
growth ra
private sei
to 1.18 pe
the growth
private se<
rate in the
G
Period
1972-73 to
1977-78
(Number in million and poverty ratio in percentage)
1977-78 to
1983
Rural sector
Year
Urban sector
Combined All India
Number
(million)
Poverty
ratio
Number
(million)
Poverty
ratio
Number
(million)
Poverty
ratio
1973-74
261
56.4
60
49 0
321
54.9
1977-78
264
53 1
65
45 2
329
51.3
1983
252
45.7
71
40.8
323
44.5
1987-88
232
39 1
75
38.2
307
38.9
1993-94
244
37.3
76
32.4
320
36.0
TABLE 10.7
Poverty incidence and growth rates in India and selected Asian countries
(in per cent)
Poverty ratio
1975
Poverty ratio
1995
___________ .
• A
Annual Reduction
In 1975-95
Percentage point
India
54.9
36.0
0.9
3.2
5.6
China
59.5
22.2
1.9
5.0
11.1
11.4
2.6
7.8
6.6
5.0
0.9
9.0
8.7
Country
Indonesia
64.3
Korea
23.0
-
1987-88 to
1993-94
Source: PI
Source: Planning Commission.
P
1983 to
1987-88
Average GDP
growth 1970-1980
Average GDP
Growth 1980-1995
Malaysia
17.4
4.3
0.7
7.8
6.4
Philippines
35.7
25.5
0.5
6.2
1.4
Thailand
8.1
0.9
0.4
7.2
7.9
Source :
For India, Planning Commission; for others World Bank Report on Social Consequences of the East Aslan
Financial Crisis, September, 1998.
Note :
For India, poverty ratios refer to the years 1973 and 1993 respectively and GDP growth rates are based
on old series with base 1980-81.
11. Table
of empk
private s
observed
contributi
organise
period si
governm
National
provide
main fo
suggest
in the oi
umbrella
of prote,
sector.
Pov
12. Inc
a wide
employt
which b
and ha1
employ
technics
147
e
e
g
n
d
e
1994. However, the growth rate of organised
sector employment maintained its declining trend
even during the period from 1987-88 to 199394. There was a significant improvement in the
growth rate of organised employment in the
private sector from 0.43 per cent in 1983-1988
to 1.18 per cent in 1987-1994. For the first time
the growth rate of employment in the organised
private sector exceeded the employment growth
rate in the pubic sector.
II
id
nt
TABLE 10.8
Growth of Employment (per cent)
Period
Growth rate of
overall
employment
Growth rate of employment in
the organised sector
Public
Private
TABLE 10.9
Growth rates of Employment in organised
sector (per cent)
Year
1977-78 to
1983
2.36
2 99
1.41
2 48
1983 to
1987-88
1.77
2 17
0 43
1 38
1987-88 to
1993-94
2.37
1 00
1.18
1.05
Total
organised
1 44
1.52
1 24
1992
0 80
2.21
1 21
1993
0 60
0 06
0 44
1994
0.62
1 01
0 73
1995
0 11
1 63
0 55
1996
(-10.19
5.62
1 51
1997
0 67
2.04
1 09
Source
2.75
Private
sector
1991
Total
1972-73 to
'1977-78
Public
sector
Planning Commission.
2 45
Source: Planning Commission
11. Table 10.9 presents the annual growth rates
of employment in the organised public and
private sector during 1991 to 199S. It can be
observed from the table that the private sector
contributed predominantly to the increase in the
organised sector employment in the reform
period since 1991 except in the year 1993. The
^>vernment has decided to set up the Second
National Commission on Labour with a view to
provide protection to millions of workers. The
main focus of the Commission would be to
suggest rationalisation of the existing labour laws
in the organised sector and also to suggest an
umbrella legislation for ensuring a minimum level
of protection to the workers in the unorganised
sector.
Poverty Alleviation and Employment
Generation Programmes
12. India’s anti-poverty strategy comprises of
a wide range of poverty alleviation and
employment generation programmes, many of
which have been in operation for several years
and have been strengthened to generate more
employment, create productive assets, impart
technical and entrepreneurial skills and raise the
income level of the poor. Under these schemes,
both wage employment and self-employment are
provided to the people below the poverty line. In
1998-99, government proposed to unify the
various poverty alleviation and employment
generation programmes under two broad
categories of Self Employment Schemes and
Wage Employment Schemes. Funding and
organisational patterns will also be rationalised
to achieve maximum beneficial impact of these
programmes. The budgetary (plan) support on
Rural Development and Rural Employment &
Poverty Alleviation has been enhanced to
Rs.9811 crore in 1998-99(BE) from Rs.8290
crore in 19P7-98(RE).
13. The salient features of some of the major
employment and anti-poverty programmes are
given below:
(a)
Integrated Rural Development Programme
(IRDP) and its allied programmes of Training
Rural Youth for Self-Employment (TRYSEM) and
Development of Women and Children in Rural
Areas (DWCRA) are major self-employment
programmes for poverty alleviation. The basic
objective of IRDP is to enable identified rural
poor families to augment their incomes and cross
the poverty line through acquisition of credit
based productive assets. Assistance is given in
the form of subsidy by the government and term
credit by the financial institutions for income
generating activities.
This is a centrally sponsored scheme funded
on 50:50 basis by the Centre and the states. It
is stipulated that at least 50 per cent of the
148
assisted families should belong to Scheduled
Caste and Scheduled Tribe categories. It is also
required that at least 40 per cent of those
assisted should be women under this
programme. About 535 lakh families have been
covered up to November 1998 since 1980-81
under the programme out of which coverage of
SC/ST families had been 45 per cent. The level
of per family investment is currently more than
Rs.17441 compared to Rs.1642 during 198081. A sum of Rs.800 crore (including Rs. 60
crore for Rural Artisans) has been provided in
1998-99 (BE), an increase of about 45 per cent
over 1997-98 (RE).
The Training of Rural Youth for Selfployment (TRYSEM) is to train rural youth
n the target group of families in skills so as
to enable them to take up self/wage
employment. It has been laid down that the
coverage of youth from SC and ST communities
should be at least 50 per cent of the rural youth
trained. Out of the total beneficiaries, at least 40
per cent should be women.
(b)
e
(c) The Programme of Development of Women
and Children in Rural Areas (DWCRA) aims to
improve the socio-economic status of the poor
women in the rural areas through creation of
group of women for income generating activities
on a self-sustaining basis. Up to November, 1998,
1.97 lakh women were benefited during 199899. A sum of Rs.100 crore has been provided in
1998-99 (BE).
Jawahar Rozgar Yojana (JRY) is a wage
employment programme with its main objective
of generation of employment in the lean
agriculture season to the unemployed and under
employed rural people both men and women
living below the poverty line. The significant
aspect of the scheme is that it is implemented
by the Panchayats at the village, block and district
levels in the ratio of 70:15:15 respectively. An
amount of Rs.2095 crore has been allocated
during 1998-99 (BE) for JRY. Against a target of
396.66 million man-days during 1998-99, a total
of 190.28 million man-days were generated up
to November 1998 with an expenditure of
Rs. 1244 crore.
(e) The Employment Assurance Scheme (EAS)
has been universalised so as to make it
applicable to all the rural blocks of the country.
It aims at providing 100 days of unskilled manual
work up to two members of a family in the age
group of 18 to 60 years normally residing in
villages in the lean agriculture season, on
demand, within the blocks covered under EAS.
A sum of Rs.1990 crore has been provided
during 1998-99 (BE). During 1998-99, a total of
237 61 million man-days have been generated
under the scheme with an expenditure of
Rs. 1572 crore up to November 1998.
(f) The Million Wells Scheme (MWS) which was
earlier a sub-scheme of JRY, is funded by the
Centre and states in the ratio of 80:20. The
objective of the MWS is to provide open irrigation
wells free of cost to poor, small and marginal
farmers belonging to SCs/STs and freed bonded
labour. A sum of Rs.450 crore has been provided
in 1998-99 (BE). Up to November 1998, a sum
of Rs. 225.90 crore has been incurred during
1998-99 and 49821 wells were constructed.
(g) The National Social Assistance Programme
(NSAP) recognises the responsibility of the
Central and state governments for providing
social assistance to poor house-holds in case of
maternity, old age and death of bread earner.
NSAP is a centrally sponsored programme with
100 per cent central funding to the States/UTs
that provides benefits under its three components
viz., (i) National Old Age Pension Scheme
(NOAPS); (ii) National Family Benefit Scheme
(NFBS); and (iii) National Maternity Benefit
Scheme (NMBS). On the basis of suggestions
made by the Central Advisory Committee on
NSAP, the Government has since approved
changes relating to enhancement in the rate of
benefits for NFBS and NMBS. A sum of Rs.700
crore has been provided for the above three
components of NSAP in 1998-99 (BE).
(h) The Swarna Jayanti Shahari Rozgar Yojana
(SJSRY) which came into operation from
1.12.1997, sub-summing the earlier urban
poverty alleviation programmes viz., Nehru
Rozgar Yojana (NRY), Urban Basic Services
Programme (UBSP) and Prime Minister's
Integrated
Urban
Poverty
Eradication
Programme (PMIUPEP). The scheme aims to
provide gainful employment to the urban
unemployed or underemployed poor by
encouraging the setting up of self-employment
ventures or provision of wage employment. It is
being funded on a 75:25 basis between Centre
and the states. It comprises two special schemes
i.e. The Urban Self-Employment Programme
(USEP) and the Urban Wage Employment
Programme (UWEP). The scheme gives a special
impetus to empowering and uplifting the poor
women and launches a special programme,
namely, De\
in urban ar
poor women
are eligible f
cost. During
crore was
SJSRY. A
provided in
crore has !
30.11.1998
(i) Prime f
providing
unemployer
employmen
Programs
A.
1.
2.
3.
4.
5.
Progra
JRY- h
EAS
IRDPTRYSf
DWCF
6.
7.
8.
9.
10.
lAY-Hc
MWSARWS
CRSP
NSAP
(a) N'
(b) N'
(c) N
B. Progra
1. NRY-i
C. Other
1. PMR
2.. SJSt
of w
(I) 1
(ii)
P
*
Targ
$ Esti
'•
Mei
@ Ca»
SS Car
« Up
»» As
So>
149
season, on
j under EAS.
sen provided
•99, a total of
en generated
penditure of
998.
’S) which was i
jnded by the .
f 80:20. The
>pen irrigation
and marginal
freed bonded
>een provided
1998, a sum
purred during
instructed.
? Prc^fmme
ibility of the
for providing
ds in case of
>read earner.
igramme with
e States/UTs
H components
ion Scheme
lefit Scheme
rnity Benefit
suggestions
ommittee on
:e approved
n the rate of
im of Rs.700
above three
IBE,
<
ozga^fbjana
ration from
arlier urban
viz., Nehru
sic Services
s Minister’s
Eradication
ime aims to
the urban
j poor by
■employment
lyment. It is
ween Centre
rial schemes
Programme
Employment
-es a special
ig the poor
>rogramme,
namely, Development of Women and Children
in urban areas under which groups of urban
poor women setting up self-employment ventures
are eligible for subsidy up to 50% of the project
cost. During the year 1997-98, a sum of Rs.98.63
crore was released to States and UTs under
SJSRY. A sum of Rs.189 crore has been
provided in 1998-99 (BE) out of which Rs.64.59
crore has been released to twelve states till
30.11.1998.
(i) Prime Minister’s Rozgar Yojana (PMRYj for
providing self-employment to educated
unemployed youth had been designed to provide
employment to more than a million persons by
setting up of seven lakh micro enterprises in
Eighth Plan. During the Eighth Plan, loan in 7.70
lakh cases were sanctioned and 5.76 lakh cases
disbursed. The scheme is being continued in
the Ninth Plan. Since inception of the scheme
up to the programme year 1997-98, over 7.52
lakh cases have'been disbursed. During 199899, 57527 cases have been sanctioned loans
and 27533 cases disbursed by the end of
October, 1998. A sum of Rs.110 crore has been
provided in 1998-99 (BE).
The achievements of the special anti-poverty
programmes are indicated in Table 10.10.
TABLE 10.10
Performance of Special Employment and Poverty Alleviation Programmes
(In lakh)
1996-97
Programmes
A.
1.
2.
3.
4
5.
6
7.
8.
9
10.
Programmes In Rural Areas
JRY- Mandays of employment generated
EAS - Mandays of employment generated
IRDP- Families assisted
TRYSEM- Youths Trained
DWCRA- (a) Groups formed
(b) Membership
IAY-House Constructed
MWS- Wells Constructed
ARWSP- Habitation/villages
CRSP-Sanitory latrine
NSAP —
(a) NOAPS- Beneficiaries
(b) NFBSBeneficiaries
(c) NMBSBeneficiaries
1997-98(P)
1998-99(P)
(upto Nov. 98)
Target
Achieve
ment
Target
Achieve
ment
Target
Achieve
ment
4141.4
3864.9
1.0
18.8
3883.7
4717.7
17.1
2.5
0.4
4.6
7.7
1.0
1.2
11.6
3966.6
1.0
8.3
4006.3
4030.0
19.2
3.6
0.4
5.8
8.0
1.1
1.0
12.2
1.1
16.0
1902.8
2376.1
7:7
0.8
0.2
2.0
3.6
0.5
0.5
5.6
53.7
4.6
46.0
46.6
1.6
14.0
48.7
2.7
25.7
40.3
1.8
15.4
48.8
2.1
17.8
40.2
1.4
6.6
1.2
135.8
1.2
0.6
44.6
0.4
-
2.2
4.4
2.2
3.2
2.2
4.4
1.8
2.6
2.2
4.4
0.3#
0.4#
B. P rogrammes In Urban Areas
1. NRY-(a) Families assisted
(b) Mandays of employment generated
(c) Persons trained
C. Other Programmes
1. PMRY -(a)Micro-enterprises @
(b)Employment generated $
2.. SJSRY $$
of which
(i) USER —
(a) Beneficiaries
(b) Persons trained
(ii) UWEP- Mandays of employment generated
2.9
0.3
11.2
3.0
0.3
7.2
P Provisional.
Targets are not fixed.
Estimated @1.5 per case disbursed for the concerned programme years.
Merged with SJSRY.
@ Cases disbursed.
$$ Came into operation from Dec., 97.
# Up to Oct.98
## As per report ending Dec., 98
$
Source: Ministry of Rural Areas & Employment and other concerned Departments.
2.9
0.6
9.9
0.2##
0.2##
12.9##
150
Literacy and Education
14. Building on educational priorities set out in
the National Policy on Education, 1986 as
modified in 1992 and its Programme of Action,
the National Agenda for Governance (NAG) has
education amongst its highest priorities. The
following educational agenda has been
specifically identified:—
• Education for All - Free and compulsory
primary education up to 5,h standard and total
eradication of illiteracy.
e Education of prioritised groups - girls, SCs/
STs and Backward classes and educationally
backward minorities.
9 Access and quality - equal access and
opportunity for all up to school stage and
improvement of quality at all levels.
• Financing of education - increase in
government and non-government spending on
education, and bringing this up to 6 per cent
GDP level.
In addition, the item on harnessing of youth
power makes a specific mention of its
involvement in the total eradication of illiteracy.
The items dealing with Constitutional and Legal
Reforms, and Information Technology have
important implications for educational planning
and management in particular.
15. In pursuance of the emphasis embodied in
the National Policy on Education and reiterated
Athe NAG, several schemes have been
launched by way of central intervention, primarily
for meeting the needs of the educationally
disadvantaged and for strengthening the social
infrastructure in the sector. The important
schemes by way of illustration are Operation
Black Board (OB), Non-Formal Education (NFE).
Teacher Education (TE), National Programme
of Nutritional Support to Primary Education
(NPNSPE) (Mid-day Meal Scheme), District
Primary Education Programme (DPEP), Total
Literacy
Campaign
(TLC),
Community
Polytechnics (CP), Shiksha Karmi Project (SKP),
Area Intensive Programme for Educationally
Backward Minorities (AIPEBM) and Integrated
Education for Disabled Children, etc. Several
resource institutions have either been
strengthened/established to achieve the
objectives of the NPE.
16. As per the report given by the National
Sample Survey Organisation (NSSO), the overall
National figure for literacy has gone up from
52.2 per cent in 1991 to 62 per cent in 1997.
The male literacy has gone up from 64.1 per
cent to 73 per cent and the female literacy from
39.3 per cent to 50 per cent during the same
period. The literacy percentage has also gone
up substantially in some of the educationally
backward states. Since independence, India has
tripled its literacy (female literacy increased by
five times).
17. The Gross Enrolment Ratio (GER) in the
primary stage (classes l-V) increased from 42.6
per cent in 1950-51 to 89.7 per cent in 1997-98
and in the upper primary stage (classes VI-VIII)
from 12.7 per cent to 58.5 per cent over the
same period. The percentage of girls’ enrolment
to total enrolment has increased from 28.1 in
1950-51 to 43.6 in 1997-98 in the primary stage
and increased from 16.1 to 40.1 over the same
period in the upper primary stage.
18. The dropout rate of girls is much higher than
that of boys at both the stages. The enrolment
of SCs and STs has increased considerably at
the primary stage. The share of enrolment of
SCs has increased from 17.1 per cent in 1986
to 19.6 in 1993 at primary stage and from 14.7
to 15.6 over the same period at upper primary
stage. Similarly, the share of enrolment of STs
has increased from 7.8 per cent in 1986 to 9.1
per cent in 1993 at primary stage and from 5.1
per cent to 5.9 per cent over the same period
at upper primary stage. Moreover, substantial
increase in the share of girls’ enrolment belonging
to these communities has also taken place.
19. In order to improve the internal efficiency
and minimum level of learning, at the school
level, the Central government has taken three
important initiatives since 1993, namely, Area
Intensive Programme for Educationally Backward
Minorities (AIPEBM), District Primary Education
Programme (DPEP) and National Programme
of Nutritional Support to Primary Education
(NPNSPE) (Mid-Day Meal Scheme).
20. The government proposes to formulate and
implement plans to gradually increase the
governmental and non-governmental spending
on education up to 6 per cent of GDP. Planning
Commission has set up an Expert Committee to
assess the current status of expenditure on
education, both in public and private sector. The
central plan allocation on education has been
enhanced from Rs.3350 crore in 1997-98 (RE)
to Rs.4245 crore in 1998-99 (BE). In order to
initiate plNational /
year’s bud
nearly 50
crore in 1:
99(BE).
populatio
21. An en
been prov
Welfare in
crore in 1'
36 per c<
welfare pr
to achievt
1981 to 3
declined f
1981 to
(CDR) a
thousand
result, th<
further c
comparec
of CBR of
except tt"
Madhya
Pradesh.
22.The .
programn
Plan. Un
Item
1. Medice
2. Hospit:
3. Disper
4. Comm
5. Primar
6. Sub-c>
7. Hospit
8. Doctot
9. Dentis
10. Nurse
NA
•
••
©
#
P
No
Pe
As
As
As
Pr
Source
151
jp from
in 1997.
>4.1 per
icy from
.e same
so gone
ationally
idia has
ased by
) in the
om 42.6
1997-98
S VI-VIII)
over the
nrolment
28.1 in
ry st^g
oe sJB
her than
nrolment
irably at
ment of
in 1986
om 14.7
primary
of STs
6 to 9.1
from 5.1
e period
bstantial
elonging
|>lace.
fficie^^
,* sctWl
en three
«!y, Area
ackward
ducation
igramme
location
i late and
.ase the
spending
Planning
mittee to
iture on
ctor. The
as been
98 (RE)
order to
initiate plan to implement the provisions of
National Agenda for Governance, the current
year’s budget (plan and non-plan) provides for
nearly 50 per cent increase i.e.from Rs.4716
crore in 1997-98(RE) to Rs.7047 crore in 199899(BE).
Population and Family Welfare
21. An enhanced outlay of Rs.2489 crore has
been provided for various programmes of Family
Welfare in 1998-99 (BE) as compared to Rs.1829
crore in 1997-98 (RE) registering an increase of
36 per cent. Through various on-going family
welfare programmes, government has been able
to achieve a decline in fertility rate from 4.5 in
1981 to 3.5 in 1995. The crude birth rate (CBR)
declined from 33.9 per thousand population in
1981 to 27.2 in 1997. The crude death rate
(CDR) also declined from 12.5 to 8.9 per
thousand population over the same period. As a
result, the natural rate of growth of population
further declined to 1.83 per cent in 1997
compared to 1.85 in 1996. The Eighth Plan target
of CBR of 26 has been achieved by major states,
except the States of Assam, Bihar, Haryana,
Madhya Pradesh, Orissa, Rajasthan and Uttar
Pradesh.
22. The Reproductive and Child Health (RCH)
programme has been introduced during the Ninth
Plan. Under the RCH Programme, several new
schemes for improving quality and coverage of
services are under implementation. The
replacement of the system of setting
contraceptive targets from
above
by
decentralised planning based on community
needs assessment has been well received in all
parts of the country.
23. The Pulse Polio Immunisation has been
continued for the fourth year during 1998-99
with the objective of eradicating polio. Two
supplemental doses of oral polio vaccine were
administered on 6.12.1998 and on 17.1.1999.
Medical and Health Care
24. Central sector emphasis continues to be on
control and eradication of communicable and
non-communicable diseases like Malaria,
Tuberculosis, Leprosy, AIDS, Blindness, Cancer,
etc. and various programmes to this effect are
being implemented with the World Bank
assistance. Measures for upgradation of central
and state levels organisations for drug quality
control and food safety and strengthening of
medical store organisations are also being
undertaken. It may be observed from Table 10.11
that there had been marked expansion in
infrastructure for health services since 1951.
25. An enhanced outlay of Rs.1195 crore
including Rs. 50 crore for Indian System of
TABLE 10.11
Expansion of Health Services
(in numbers)
Item
1. Medical Colleges **
1951
1961
1971
1981
1992
1996
1997
28*
60
98
111
146
165
165
2. Hospitals "
2694
3094
3862
6804
13692
15097#
NA
3. Dispensaries "
6515
9406
12180
16751
27403
28225#
NA
0
0
0
217
2186
2572
2628
725
-
2565
117178
61840
9. Dentists ’*
3290
10. Nurses **
16550
4. Community Health Centres @
5. Primary Health Centres @
6. Sub-centres @
7. Hospital bedsfall types)"
8. Doctors **
NA
*
“
©
#
P
5112
5740
20701
21917
22446
28489
51405
131370
134931
136379
230000
348655
569495
834650
870161#
NA
83756
151129
268712
395851
375291 (P)
484401 (P)
3582
35584
5512
8648
11300
23953#
NA
80620
154280
385410
565696
NA
Not available
Pertains to 1950
As on December 31
As on March 31
As on 31.12.95
Provisional
Source : Ministry of Health and Family Welfare.
152
Medicine and Homeopathy has been provided
in 1998-99 (BE) as compared to Rs.918 crore in
1997-98 (RE). The Department of Indian System
of Medicine and Homeopathy (ISM&H) has
identified thrust areas namely improving the
standards of education and strengthening the
educational institutions, standardisation of drugs
and quality control, enhancing the availability of
raw material, information, education and
communication, etc. Specialty clinics of Unani,
Ayurveda and Homeopathy have been set up in
major allopathic hospitals like the Ram Manohar
Lohia Hospital and Safdarjung Hospital
respectively.
^Jevelopment of Women and Children
26. The strategy of women’s development
comprises social and economic empowerment
of women through attitudinal change towards
girl child, and education, training, employment,
support services and emphasis on women’ rights
and law. Similarly, for the child, various schemes
to raise nutritional and early childhood care and
pre-school educational status have been
implemented. A provision of Rs. 1226 crore has
been provided in 1998-99 (BE) as against
Rs.1026 crore in
1997-98 (RE), for
implementation of various welfare schemes for
women and children.
27. Under the scheme of Balika Samridhi
Yojana launched on October 2, 1997 with a
specific objective to encourage the enrolment
Jhd retention of girl child in the schools, the
mother of a girl child born on or after August 15,
1997 in a family, below the poverty line in rural
and urban areas is given a grant of Rs.500
besides a scholarship for education of the girl
child when she attends school. 12 lakh girl
children were benefited during 1997-98. A sum
of Rs.60 crore has been provided in 1998-99
(BE) under the scheme.
28. The scheme for school drop-out adolescent
in the age group of 11-18 year is being
implemented in 507 blocks of ICDS projects. So
far four lakh adolescent girls have been benefited.
Six projects under Support to Training and
Employment
Programme
(STEP) were
sanctioned to benefit 53325 women during 199798. A sum of Rs. 16 crore has been provided
during 1998-99 (BE).
29. Under Indira Mahila Yojana (IMY) for
empowerment of women, 28000 small
homogeneous women’s groups were formed up
to 1997-98. A sum of Rs.10 crore has been
provided in 1998-99 (BE). The scheme of Mahila
Samridhi Yojana (MSY) to inculcate habit of
saving among rural women is being revised and
merged into IMY to have an integrated package
of 5 components including formation of viable
women’s group.
30. Under the scheme of Employment and
Income Generating Training-cum-Production
centres, partially funded by Norwegian Agency
for International Development and Cooperation
(NORAD), 178 projects were sanctioned to
benefit 36095 women in 1997-98. A budgetary
provision of Rs. 18 crore has been provided in
1998-99 (BE) under this programme.
31. The Rashtriya Mahila Kosh (RMK) set up for
meeting the credit needs of the poor women
has sanctioned loan to 250312 women during
1997-98. Under the scheme of Short Stay Home
for Women and Girls, there are 361 short homes
running in the various parts of the country to
benefit 10830 women. Since inception, 811
working women hostels have been sanctioned
to benefit 56974 women for single, divorced,
married and widowed women who migrate to
towns and cities in need of employment.
32. For the welfare and development of the
children, the Integrated Child Development
Services (ICDS) scheme aims to provide an
integral package of services of health check
up, immunisation, supplementary nutrition,
referral services, pre-school education, nutrition
and health education to children, pregnant
women and nursing mothers. The scheme which
started in 1975-76 on an experimental basis in
33 projects has been extended to 5614 centrally
sponsored ICDS projects of which 4200 projects
are now operational. The programme benefited
3.81 million expectant and nursing mothers and
21.0 million children under six years of age. A
sum of Rs.603 crore has been provided in 199899 (BE). Apart from ICDS the other programme
for child development are day-care centers for
children below five years belonging to weaker
sections of the society, Balwadi Nutrition
Programme, Early Childhood Education and
National Institute of Public Cooperation and Child
Development.
Welfare of Weaker Sections
33. The National Scheme for Liberalization and
Rehabilitation of Scavengers aims to provide
alternate dig
scavenger a
which was
includes TR
central ass
Developmer
approach i
programme
Finance am
January 1
education
community
employme
entreprenen
34. The II
reconstitu'
effective in
for the we
High Pow
economic
Central G
towards f
Finance C
cent.
35. The
monitored
Special C
Plan (TS
assistanc
The cons
Plan (195
against t
target foi
families <
assisted.
been fix'
ST famili
On goir
matric s
to SC b
in 1998
36. In
develop
person'
prevent
Rs.153
sector
schemt
societ’
disabil’
defenc
153
alternate dignified and viable occupation to each
scavenger and his/her dependents. The scheme
which was modified w.e.f. 1.4.1996, inter-alia,
includes TRYSEM norms for training, release of
central assistance direct to Scheduled Caste
Development Corporation and adoption of cluster
approach in the training and rehabilitation
programme. The National Safai Karamchari
Finance and Development Corporation set up in
January 1997 provides
loans for higher
education to students from safai karamchari
community besides providing assistance in self
employment ventures and technical and
entrepreneurial skills.
34. The National Commission for Minorities,
reconstituted w.e.f. 26.11.1996 to focus on
effective implementation of 15 point programme
k>r the welfare of minorities, has constituted a
Tligh Powered Study Committee for socio
economic conditions of minorities in India. The
Central Government has raised equity share
towards National Minorities Development and
Finance Corporation from 25 per cent to 60 per
cent.
35. The welfare of STs and SCs is being closely
monitored by the state governments through the
Special Component Plan (SCP) and Tribal Sub
Plan (TSP) with the support of special central
assistance provided by the Central government.
The consolidated achievements during the Eighth
Plan (1992-97) had been 51.53 lakh ST families
against the target of 49.78 lakh families. The
target for 1997-98 was fixed as 10.97 lakh ST
families out of which 9.86 lakh ST families were
^^isted. A target of 11.01 lakh families has
been fixed for 1998-99 out of which 4.13 lakh
ST families have been assisted up to 30.11.1998.
On going schemes like pre-matric and postmatric scholarship and providing hostel facilities
to SC boys and girls continued to be operative
in 1998-99.
36. In addition to various schemes for the
development and growth of welfare of disabled
persons, a national centre for drug abuse
prevention has been established. A sum of
Rs.1539 crore has been provided in central
sector plan during 1998-99 (BE) for various
schemes of welfare of weaker sections of the
society including minorities, persons with
disabilities and others covered under Social
defence.
Housing
37. The Central government provide policy
guidelines for housing programmes for various
target groups and supplements the efforts of
the state governments by implementing certain
central sector/centrally sponsored schemes
mainly for the benefit of urban poor.
38. A new National Housing and Habitat Policy
1998 has been formulated which was approved
and laid before the Parliament on 29.7.1998.
The objectives of the policy are to facilitate
construction of 20 lakh dwelling units each year
with emphasis on the poor. Out of 20 lakh
additional houses, 7 lakh houses would be
constructed in urban areas and 13 lakh in rural
areas. HUDCO is expected to meet more than
55 per cent of the target i.e. 4 lakh units and the
balance 3 lakh units per year will be met by
other housing financial institutions recognised
by the National Housing Bank, corporate sector
and cooperatives.
39. A scheme of Night Shelter and Sanitation
Facilities for the urban footpath dwellers is being
implemented as a centrally sponsored scheme
in the metropolitan and other major urban
centres. 61 schemes benefiting more than 40000
footpath dwellers have been sanctioned by
HUDCO as on 31.10.1998 in various parts of
the country since April 1991. A sum of Rs.1600
crore has been provided as central outlay in
1998-99 (BE) for rural housing with a target to
construct 923908 houses under the Indira Awas
Yojana (IAY) in the current year. The existing
housing programme of the IAY for construction
of new houses free of cost for the target group
below the poverty line comprising SCs/STs, freed
bonded labourers and also non-SC/ST families
will continue. In addition, a new component for
upgradation of kutcha and unserviceable houses
will be introduced.
40. The Government has promulgated an
ordinance to repeal the Urban Land (Ceiling and
Regulation), Act 1976 (ULCRA). It will be
implemented in all Union territories and two
states of Haryana and Punjab. This was aimed
at speedy growth in sectors like housing and
transport, land assembly, development and
disposal of excess land would be facilitated. The
Delhi Rent Act, 1995 was enacted for
overcoming the shortcomings in the existing Rent
Act but after taking into consideration various
representations, the government decided to
amend the Act to make it more acceptable and
154
encourage improvement in housing sector.
Accordingly, the Delhi Rent (Amendment Bill) was
introduced in the Rajya Sabha on 28.7.1998.
The proposed Bill has again been referred to
the Parliamentary Standing Committee on Urban
and Rural Affairs.
Water Supply and Sanitation
41. Due
to
rapid
urbanisation
and
industrialisation, the challenge of providing basic
amenities is mounting. Accelerated Urban Water
Supply Programme (AUWSP) is aimed to provide
safe and adequate drinking water supply facilities
to the entire population of towns having
population less than 20,000 (as per 1991
Census) in the country. As on 13.11.1998, water
supply schemes had been approved for 286
towns in various states, which account for 13.3
per cent of the total number of towns having a
population up to 20,000. Table 10.12 gives
percentage coverage of population with drinking
water and sanitation facilities in urban and rural
areas. The Central budgetary provision has been
enhanced to Rs.1727 crore in 1998-99 (BE) from
Rs.1402 crore in 1997-98 (RE) for Rural Water
Supply and Sanitation.
TABLE 10.12
Population Covered with Drinking Water and
Sanitation Facilities
(Percentage coverage as
on March 31)
Item/Area
1985
1990
1995
1997
(Estimated)
Drinking Water Supply
Rural
56.3
73.9
82.80
86.74
Urban
72.9
83.8
64.334
90.62 @
Sanitation Facilities
Rural
0.7
2.4
3.59
6.37*
Urban
28.4
45.9
49.91#
49.32 @
#
*
@
Source :
As on 31.3.1993
With Government initiative under CRSP, MNP, JRY
and IAY
Tentative figure.
Ministries of Rural Areas & Employment and Urban
Affairs and Employment
Outlook
42. Human development remains at the core
of our planning and on-going economic reforms.
If the people are educated, skilled and more
healthy, they can contribute more to economic
development as well as benefit from it. Sustained
efforts are necessary not only to improve the
quality of services but also to reduce inter
regional and inter-sectoral disparities in human
development. Along-with augmenting public
efforts by increasing utilisation of Panchayati Raj
initiative in local planning, monitoring and making
use of available local and community resources,
it is necessary to create an enabling environment
for more private sector support and participation
by the Non-Governmental Organisations (NGOs)
in health care and education. The feasibility of
rationalising user charges in the field of health,
higher education, sanitation, water supply and
other services for the people above poverty line
on the basis of actual supply costs or at least
actual operational costs needs to be pursued.
43. Employment generation and anti-poverty
programmes have proliferated over the years.
Each scheme is well intentioned but their
multiplicity has led to needless duplication, high
overhead costs, confusion at field levels and
insufficient benefits to the people. Sustained
efforts are necessary to unify these programmes
under broad categories of Self Employment
Schemes and Wage Employment Schemes for
better management, evaluation and monitoring.
Available resources need to be better targeted
and effective safety nets designed for protection
of weaker and vulnerable sections of the society
who might be adversely affected in the process
of economic development.
44. We need to reformulate an anti-poverty
strategy that is fiscally sustainable and more
finely targeted to those who truly cannot benefit
from the opportunities offered by growth and
economic reforms. Safety nets may focus on
those who either cannot participate in the growth
process (such as for reasons of extreme
deprivation or vulnerability combined with
poverty) or face continuing exposure to risks
uncertainties of economic forces. Effective safety
nets that insure rural poor against the income
fluctuations, such as public works programmes
need to be strengthened.
Co m y-' '
o • v<°
GENERAL REVIEW
Review of Developments
Macroeconomic Overview
Economic developments in India in 1998-99
have to be viewed against the backdrop of an
exceptionally turbulent and unfavourable
international economic environment. The year
saw significant declines in the GDP of a number
of East Asian Countries (over 15 per cent in
Indonesia and 5-7 per cent in S. Korea and
Thailand), continuing recession in Japan, severe
financial crisis in Russia, unusual volatility in
capital and forex markets of industrial countries,
continuing drought in capital flows to developing
countries and a sharp devaluation in Brazil in
January 1999 as a result of capital flight triggered
by continuation of unsustainable fiscal weakness.
The extension of the East Asian crisis to countries
in other continents ensured slowdown of world
growth to less than 2 per cent in 1998 with little
prospect of recovery in 1999. World trade growth
also decelerated sharply, commodity prices fell
and deflation affected much of the world economy.
India was not wholly immune to these
unfavourable developments.
2. The new, 1993-94 based GDP series recently
released by the Central Statistical Organisation
(CSO) shows that GDP growth decelerated
significantly in 1997-98 to 5.0 per cent from 7.8
per cent in 1996-97 (Table 1.2a). The deterioration
in growth was perhaps even worse, if one takes
into account the fact that fully one percentage
point of growth is attributed to the 20 per cent
increase in real value added in the ‘public
administration and defence’ sub-sector arising
chiefly from pay increases to government
servants. The economy recovered to an estimated
growth of 5.8 per cent in 1998-99. The recovery,
from the cyclical downturn that started towards
the end of 1996-97, would have been firmer but
for the East Asian crisis and its effect on world
import demand and on international capital
markets. Domestic uncertainty arising from non
economic factors also played a role in slowing
recovery. Inflation rose sharply during 1998-99,
because of an exceptional spurt in prices of a
handful of agricultural commodities. The pressure
from this source has, however, begun to abate
during the last quarter of 1998-99. The inflation
rate which peaked at 8.8 per cent in late
September dropped steeply from December to
below 5 per cent in January. Average inflation for
the whole of 1998-99 will, however, be higher
than the 4.8 per cent registered in 1997-98.
3. The deceleration in the growth of India's
exports (in US dollars) continued for the third
year in succession and growth was negative for
the first nine months of the year. Imports, on a
BOP basis, have decelerated even more sharply,
largely because of a decline in the prices of oil
and other commodities, but also because of a
slow down of non-DGCl&S imports. The current
account deficit consequently fell from 1.6 per cent
of GDP in 1997-98 to a projected 1.4 per cent of
GDP in 1998-99.* Total net capital inflows in
1998-99 are expected to be lower than in 199798 as a result of a deceleration in the private
inflows. The decline in foreign direct investment
(FDI) and commercial borrowing and outflow of
portfolio investment by Foreign Institutional
Investors (Fils) had been only partly off set by
the inflow under Resurgent India Bonds (RIBs).
Despite these trends, foreign currency reserves
(exclusive of gold and SDRs) continued to
All ratios to GDP are noticeably lower using the new GDP series because the new series estimates GDP levels about
Per cent higher on average than the old series for years for which both series are available.
■ 2
TABLE 1.1
Key Indicators
1995-96
1996-97
1997-98
1998-99
Absolute Values
1995-96
1996-97
1997-98
1998-99
Per cent change over previous period
Gross national product
(Rs.thousand crore)
At current prices
At 1993-94 prices
1089.8
913.8
1272.2 P
988.3 P
1413.20
1038.7 a
1099.7 a
Gross domestic product
(Rs.thousand crore)
At current prices
At 1993-94 prices
1103.2
926.4
1285.3 P
999.0 P
1426.7 0
1049.2 0
Agricultural production(t)
160.7
175.4
Foodgrains production
(million tonnes)
180.4
Industrial production^)
17.1
7.8
16.7P
8.1 P
11.1 a
5.1 a
5.9 A
1110.0a
16.9
7.6
16.5P
7.8 P
11.0 a
5.0 a
5.8 A
164.9
171.3P
-2.7
9.1
-6.0
3.9 P
199.4
192.4
195.3P
-5.8
10.5.
-3.5
1.5 P
122.3
129.1
137.6
139.2#
12.8
5.6
6.6
3.5 #
Electricity generated
(Billion, KWH)
379.9
394.5
420.6
329.4 #
8.4
3.8
6.6
6.6 »
Wholesale price index(3)
299.5
320.1
337.1
353.9 '
4.4
6.9
5.3
4.6 •
Consumer price index for
industrial workers(-t)
319.0
351.0
380.0
429.0®
8.9
10.0
8.3
15.3 ®
Money supply (M3)
(Rs.thousand crore)
604.0
701.8
825.4
934.7(5)
13.7
16.2
17.6
13.2(6)
Imports at current prices
(Rs. crore)
(US S million)
122678
36678
138920
39133
151553
40779
132447#
31583 #
36.4
28.0
13.2
6.7
9.0
4.2
23.2 #
7.1 #
Exports at current prices
(Rs. crore)
(US S million)
106353
31797
118817
33470
126286
33980
101850#
24287 #
28.6
20.7
11.7
5.3
6.3
1.5
11.7 u
-2.9 #
Foreign currency assets (7)
(Rs. crore)
58446
(US S million)
17044
80368
22367
102507
25975
116515(8)
27429(8)
-11.5
-18.1
37.5
31.2
27.5
16.1
13.7(8)
5.6(8)
Exchange rate
(Rs/US $) (to)
35.50
37.16
41.99(9)
-6.1
-5.8
-4.5
-11.5(9)
33.45
NA
NA
NA
NA
Note : Gross national product and Gross domestic product figures are at factor cost (new series with base 1993-94).
Q-Quick estimates; A-Advance estimates; P-Provlsional;
NA: Not available
1. Index of agricultural production (of 46 crops, Including plantations) with base triennlum ending 1981-82=100.
2. Index of Industrial Production 1993-94=100.
3. Index with base 1981-82=100, at the end of fiscal year.
4. Index with base 1982=100, at the end of fiscal year.
5. Outstanding as on January 15, 1999 for 1998-99 and end of financial year for previous years.
6. April 1, 1998 to January 15, 1999.
7. Outstanding at the end of fiscal year.
8. At the end of January, 1999.
9. April-January, 1998-99.
10. Per cent change indicates the rate of appreciation/depreciation (-) of the Rupee vis-a-vis the US dollar.
• As on 30.1.1999 (Provisional).
@ Dec. 1998.
# April-December, 1998.
G<amvt - 3-0-M(
Not Quite, Not Enough: Financial Allocation and the
Distribution of Resources in the Health Sector
Sharifa Begum
Binayak Sen
Bangladesh Institute of Development Studies (BIDS)
A Report Circulated in Connection with the International Workshop on "Meeting the Health Needs
of the Poorest and the Most Vulnerable" Organised by BIDS and WHO
11-13 April, 1999
Dhaka, Bangladesh
Not Quite, Not Enough: Financial Allocation and the
Distribution of Resources in the Health Sector
Sharifa Begum
Binayak Sen
I. Introduction
1.1
Setting the Agenda
It would be misleading to give the impression that it is only direct health care provision that
can promote sustained progress in health improvement. Yet, the factor that most directly
related to health status and remain of prime importance in determining the health outcomes
in a population is the practical effectiveness of the health care system. The World Bank
(1993) reports that about one-third effect of economic growth on life expectancy comes
through the poverty reduction and remaining two thirds comes from increased public spending
on health.
In Bangladesh although considerable progress has been made so far in making provision for
health care services to the people, field level information indicates that a meager 12 percent
of the total health care used by rural people is delivered by the government health care
facilities. The 88 percent is supplied by the private sector dominated by untrained or quack
practitioners. More ominously, in the total health care share of the government sector has
declined substantially over the past decade from 20 percent in 1984 to 12 percent in 1995
having adverse effect on the use of quality health care by the rural people with such effect
being greatest on the poor, women, and the children. However, the situation could have been
more intolerable had there been no government facilities in place (Begum 1996).
While supply-side limitation to provide required services may be responsible for this poor and
deteriorating performance of the public sector in meeting health care needs of the people, also
there are indications that these services lack adequate demand. The problems, vary between
tiers of the service provision. The district hospitals generally are overcrowded with capacity
unequal to demand. But facilities at lower levels are characterised by underutilization and this
is mainly due to lack of people’s confidence in the Upazila Health Complexes (UHC) owing
to poor quality of care provided by them, inadequate supply of drugs and other necessary
prerequisites for treatment, unhealthy and unprofessional attitudes and practices of the health
care providers, poor managerial practices, unwillingness of doctors to serve in the rural areas
giving rise to frequent absence of them in the health centres, etc. (GOB 1990; Begum 1988).
A BRAC (1990) study has observed that doctors deployed in the countryside, unsupported in
isolated position are dangerously inexperienced and are of little real use.
Evidently, correction of this situation requires more resources and it hardly requires any
mention that a poor country like Bangladesh will find it extremely difficult to devote the
amount of resources that would be required to achieve results significantly better than that
currently exists in the health sector. According to recent studies (Kawnine 1995; 1996) the
massive efforts made to combat the problems of health sector including the $ 640 million
Fourth Population and Health Project is sufficient neither to meet future needs nor planned
services.
This being the situation in most developing countries, a primary concern in all these countries
including Bangladesh has been mobilization of resources for health sector. While increase in
public sector expenditure is a way to improve access of the people to the health care services,
it is not the only way to do so. Another alternative to do so or increase the sectoral efficiency
is to ensure that the resources made available to it are put to the best possible use so that the
best possible health results can be achieved. In other words, even without the increased public
spending, efficiency of the sector in improving the health status of the people can be increased
substantially through prudent intra-sectoral allocation and better management of the resources
available. Thus, while the total health expenditure is important, the nature of expenditure too
counts, and it counts sometimes even more in giving the poor and the needy an access to
health care services (Rahman and Ali 1996).
1.2 Objectives and Scope
The present exercise seeks to examine the macro allocation of resources and resource flows
to the health sector in Bangladesh (including intra-sectoral distribution of resources). This will
facilitate our understanding of the nature of current resource use as well as help identify the
potential opportunities for improving sectoral impact on health status. The paper also intends
to examine the incidence of benefit of public expenditure on health that accrues to people of
different economic strata with a focus on rural area.
The first part of the exercise viz., the review of financing health sector and the health sector
spending will be carried out using macro level fiscal information as provided by the Ministry
of Finance and the Annual Development Plan (ADP) documents published by the Ministry
of Planning. It does not require any mention that data from these sources, at least in published
form, are not readily available at suitable levels of disaggregation, restricting the scope of
2
analysis at desirable length. We, therefore, tried to dig some unpublished background data
pertaining to Annual Development Plan (ADP) for examining the intrasectoral allocation
issues. The first part is presented in Sections II. The second part indicating the incidence of
benefit of public health expenditure is analysed using combined information collected from
macro budgetary data and 62-vilIage surveys carried out under the Analysis of Poverty Trends
(APT) project of BIDS and is presented in Section III. Summary and concluding observations
of the study are provided in Section IV.
II. Macro Review of Public Health Spending
II.I Allocation of Resources to Health
Allocation of resources to health can be judged from various angles. The indicator may be
expressed as percentage of Gross Domestic Product (GDP), as proportion of total public
spending measured in relation to revenue (current) and development (capital) expenditures;
it is also useful to quantify it in terms of real per capita spending.
Data on the first indicator viz., on total health expenses including private, public, and NGO
expenses are not available. This is primarily due to non-availability of the information on
private or household expenses on health constituting major part of the total expenses. Yet,
as an World Bank (1993) estimate indicates including public, household, and NGO expenses
Bangladesh in 1990 has spent about 3.2 percent of the Gross Domestic Product(GDP) on
health. The share has not changed much thereafter. The estimate available from the
Bangladesh Bureau of Statistics (BBS) indicates similar figure for the same for 1994/1995
(Rabbani et.al., 1997, BBS, 1997). Thus, despite being poor as far as the Bangladesh’s
potential ability to devote more resources to health is concerned there seems some scope for
it. According to World Bank (1993, Table-A8) report, India with real per capita income not
much different from Bangladesh spent 6 per cent of the GDP to health in 1990, Nepal spent
4.5
percent, Sri-Lanka 3.7 percent, and China 3.5 percent.
However, although the household expenses On health is not known, public sector expenses for
the same is known for recent years. Table 1 presents the percent of GDP spent on health in
different years since 1980/81. As shown by the figures the share of publicly funded health in
3
the total GDP has been all along less than 1 percent. Throughout 1980s till 1991/92 the share
was indeed around 0.6 percent with some year to year fluctuation. It then made a visible jump
to a figure of nearly 0.8 percent in 1992/93, increasing further to 0.86 percent in 1993-94.
The figure was same 0.86 percent in 1994/95.
As expected the expenditure on health (Table 2) is also very low in Bangladesh in per-capita
terms. Indeed, as an estimate indicates (World Bank, 1993) as regards modem drugs,
Bangladesh spends less per head of population than almost any other country. The per capita
public spending on health in current price in 1994-95 is estimated to be only Tk.85 and was
about Tk 14 in 1980-81. Thus, this has increased nearly by 6 times during the last 15 years.
In constant price the situation is however, much less impressive. The real increase has been
only in the order of two times. A detailed scrutiny of the trend reveals that in early years of
1980s viz., upto 1983, there has been no real increase in per capita public health expenses.
In all these years it has been Tk. 22 (in 1984/85 constant price). It then rose to Tk. 24 in
1983/84 and, with some irregularity in trend, rose to Tk. 29 in 1991/92. In 1992/93 it made
a big jump to Tk. 38 increasing further to Tk. 43 in 1993/94 and to Tk. 45 in 1994/95.
Hence, as these figures too indicate, health sector expenses received a relatively increased
attention in 1992-94 period. As other studies too noted, social sector as a whole received
higher attention for resource allocation during that period (Sen 1996).
4
Table 1
Public Sector Spending as Percent of GDP
Year
% of GDP
1980-81
0.56
1981-82
0.58
1982-83
0.57
1983-84
0.59
1984-85
0.63
1985-86
0.56
1986-87
0.56
1987-88
0.61
1988-89
0.58
1989-90
0.59
1990-91
0.62
1991-92
0.60
1992-93
0.77
1993-94
0.86
1994-95
0.86
Source: Various Statistical Year Books.
5
Table 2
Estimated Per Capita Public Spending on Health (Actual)
(Including Revenue and Development Expenditure)
(in Tk.)
Period
At current price
At constant price
(1984/85 = 100)
1980 - 81
14.4
22.0
1981 - 82
16.3
22.5
1982 - 83
17.7
22.5
1983 - 84
22.0
24.5
1984 - 85
26.3
26.3
1985 - 86
25.5
23.2
1986 - 87
30.0
24.6
1987 - 88
35.2
26.8
1988 - 89
36.2
25.6
1989 - 90
40.4
27.3
1990 - 91
47.6
29.3
1991 - 92
49.2
29.1
1992 - 93
64.2
37.9
1993 - 94
76.3
43.1
1994 - 95
84.7
45.3
Source:
Estimated from Expenditure figures quoted in Chowdhury and Sen and Population
Figures in BBS Statistical Yearbook.
In Bangladesh the institutional delivery of health care services' almost solely lies in the hands
of the government. Organised private sector plays a negligible role for this, and that too is
limited to few large metropolis only. Hence, the public sector expenses on health is the major
determinant of the growth of the health care facilities as well as quality of health care services
in the country.
1 health care delivery institutions refer to formally
organized/managed health care centres, clinics, hospitals etc..
The
(private)
chamber of individual doctors has not been
condisered as institution.
6
As shown in Table 3, whatever expenditure is made by the government in a year taking
revenue and development expenditures together, roughly 3 to 4 percent of it is spent on
health. During the first half of the eighties the public expenditure on health showed an upward
tendency. During 1980/81 the health sector share in the total expenditure figure was 3.4
percent. This rose to 5.5 percent in 1984-85. After 1985 viz. during the later half of the
eighties the share declined again, and much less than 4 percent expenditure was made on
health during 1985/86 to 1990/91. This may be the initial expenditure-reduction effects of
structural adjustment that was carried out in those years. In early 90s, the expenditure on
health increased again albeit only to reach a figure of 4 percent. The share of health sector
in revenue expenditure is noticeably more than that in development expenditure. During 1980s
and early 90s health sector’s share in revenue expenditure varied between 5 to 7 percent. The
corresponding figure in development expenditure varied between less than 1 to 3 percent.
An over time comparison indicates that both revenue and development expenditures on health
increased during the first half of the 1980s, the figure for the former reaching a level of 7
percent, and for latter the about 3 percent in 1984/85. Both the shares declined in the second
half of the 1980s, but the drop was more marked in case of development expenditure (from
just 3 per cent in 1982/83 to 1 per cent in 1989/90, the figure was less than 1 percent during
1986-88). It is striking that the share of health sector in development expenditure has been
kept at a very low (1 per cent) level through out the later half of the eighties -- a period
roughly coinciding with the initial years of structural adjustment2. The situation improved
somewhat during the early years of 1990s, a period coinciding again with ESAF3. During
1990/91 to 1992/93, for instance, public health expenditures in both revenue and development
budgets increased. However, the overall level on both counts still remained below the level
achieved during 1983/84-1984/85.
Note that the somewhat encouraging trend observed for development expenditure during the
brief spell of 1991-93 could not be sustained subsequently. By 1993/94, the matched figure
dropped substantially to 1.3 per cent. This has happened primarily due to the fact that the
government has withdrawn substantially from the health development expenditure in those
years although project aid for the same increased (Table 5).
2 Note that the SAF--Structural Arrangement Facilitysupported by the World Bank and IMF spanned roughly between the
period 1987 and 1990.
7
In short, despite some signs of improvement and recovery during particular spells, the record
of the entire decade preceding 1993/94 (the last year for which data are available) was
dismally poor in terms of sectoral allocations for health, and this cut both revenue and
development expenditure; the trend of decline was more pronounced in case of development
(Table 3).
The public health expenses in absolute amount underscore some of these features more clearly
(Table 4). In 1984/85 constant price, the health expenses increased during 1980-85 period. It
was Tk.197 crore in 1980/81 and Tk.256 crore in 1984/85. It then declined substantially
during 1985-87, increased again in 1987/88 and declined in 1988/89. Since 1989/90 it had
been making a monotonic increase, the progress being quite pronounced during the 1991/92
to 1993/94 period. The pace of progress, however, has evidently slowed down by 1994/95.
It seems that the quantum increase in revenue expenses recorded in 1992/93 was largely an
outcome of rescaling of the national pay scale in that year.
Interestingly, the two categories of expenditure - revenue and development did not moved in
the same direction. The revenue expenses on health seem to be the privileged category: it
increased steadily in real terms during 1980-95 (with the exception of 1988/89). The increase
was spectacular during 1992-94,
with some decline in 1994/95. In contrast, development
expenses on health (in 1984/85 constant price) had experienced a decline throughout the 1980s
till 1991/92 (Table 4). Note that even in current prices, the development expenses showed no
clear trend during that period. The situation changed for better in this respect as real
development expenditures for health increased in the subsequent period starting from 1992/93
by a considerable margin.
The distribution of the health sector expenditures into revenue and development expenditures
reveals that during 1975-83 the weight of these two types were almost equal in the total
public expenditure. Subsequent to that, the situation changed dramatically: from 1983/84
revenue expenditure started outgrowing its "development" counterpart. This tendency persists
till 1992/93 when the share of revenue expenses had been 74 percent and that of development
26 percent. This is probably due to the fact that increased development activities with a lag
put pressure on revenue expenditure as well, since recurrent costs of the facilities created thus
is to be borne under the revenue head by the Government. Since 1992/93 the share of revenue
expenditure in total public health expenditures showed a declining trend and as of 1994/95
8
it stood at 62 percent with development expenditure being 38 percent (Table 5). Thus,
although both revenue and development expenditures during 1992-95 period made an upsurge,
the increase in latter was relatively more. Indeed, as noted before the revenue expenses on
health in 1994/95 declined in real term but increased substantially in case of development
expenditure (Table 4).
As mentioned before, GOB represents the major provider of resources in the health sector.
While it is responsible for the entire revenue expenditure, it supplies the substantial part of
the development expenditure too. Assuming that the actual development expenses from
government and external sources have been proportional to the allocation made under this
heads, as the estimates indicate, during the entire period of 1980-82, when the development
expenditure had been around 45 percent of the total expenditure, about three-fourth of it was
borne by the Government. Thus, in total 89 percent of the expenses on health during that
period originated from the Government. The remaining 11 percent was in the form of project
aid (PA) originating from the sources outside Government. During 1982/83 to 1991/92 which
roughly includes the period of Structural Adjustment about 66-74 percent of the total expenses
was in the form of revenue expenditure which has been the responsibility of the Government.
In addition, it supplied about half or little more of the development expenses making the
government share in the total expenses again about 89 percent, with 11 percent being from
external sources. Only since 1992/93 the external sources started making greater contribution
to total expenses on health. It was about 16 percent in 1992/93, 19 percent in 1993/94, and
about 25 percent in 1994/95. Thus, during the period of entire 1980’s till 1991/92 the project
aid played a minimal role and major supplier for public health expenditure has been domestic
sources.
9
Table 3
Public Expenditure on Health (Actual)
% of Expenditure made on health
Year
Source:
Total
Revenue
Development
1980-81
3.4
6.1
1.9
1981-82
3.7
5.7
2.4
1982-83
3.8
4.9
3.0
1983-84
4.3
7.0
2.6
1984-85
5.5
7.1
2.7
1985-86
3.8
5.2
2.3
1986-87
3.6
6.3
.9
1987-88
3.8
6.4
.8
1988-89
3.4
5.2
1.0
1989-90
3.4
5.4
1.0
1990-91
3.6
5.5
1.1
1991-92
4.0
5.6
1.9
1992-93
4.6
6.4
2.2
1993-94
4.0
6.7
1.3
Chowdhury and Sen (1997).
10
Table 4
Public Expenses as Health in current and Constant price (1984/85 = 100)
(Tk. in crore)
Development Exp.
Total Expenses
Revenue Exp.
Current
price
Constant
price
Current
price
Constant
price
Current
price
Constant
price
1980-81
129.22
197.0
68.07
103.8
61.15
93.2
1981-82
149.25
205.8
80.03
110.4
69.22
95.5
1982-83
167.07
212.8
93.18
118.7
73.89
94.1
1983-84
209.65
233.2
138.84
154.4
70.81
78.8
1984-85
256.43
256.4
163.42
163.4
93.01
93.0
1985-86
260.96
237.6
182.85
166.5
78.11
71.1
1986-87
304.11
249.5
227.95
187.0
76.16
62.5
1987-88
364.22
277.6
275.92
210.3
88.30
67.3
1988-89
382.04
270.3
295.58
209.1
86.46
61.2
1989-90
434.86
293.3
332.37
224.2
102.49
69.1
1990-91
521.95
321.8
368.02
226.97
153.93
94.9
1991-92
549.29
325.0
405.56
240.0
143.73
85.0
1992-93
730.39
431.6
515.24
304.5
215.15
127.1
1993-94
887.38
500.9
603.40
340.6
283.98
160.3
1994-95
1005.21
537.9
628.38
336.2
376.83
201.6
Period
Source: Current Price is taken from Ministry of Finance; Grants and Appropriation (different
volumes) and factors for adjusting the current price for constant price are taken from the bangladesh
Bureau of Statistics.
11
Table 5
Distribution of Total Expenditure on Health into Revenue and
Development Expenditure and the Share of Government and
Project Aid (PA) in the Development Allocation
Distribution of total Expenditure
Year
Revenue
Development
Distn. of Development Allocations
into
GOB
P.A.
1975-76
49.0
51.0
-
-
1976-77
50.3
49.7
-
-
1977-78
49.5
50.5
-
-
1978-79
55.4
44.6
-
-
1979-80
54.9
45.1
-
-
1980-81
53.0
47.0
.76
.24
1981-82
54.0
46.0
.76
.24
1982-83
56.0
44.0
.67
.33
1983-84
66.0
34.0
.67
.33
1984-85
64.0
36.0
.46
.54
1985-86
70.0
30.0
.43
.54
1986-87
75.0
25.0
.70
.30
1987-88
76.0
24.0
.56
.44
1988-89
77.0
23.0
.53
.47
1989-90
76.0
24.0
.38
.62
1990-91
70.0
30.0
.47
.53
1991-92
74.0
26.0
.56
.44
1992-93
70.0
30.0
.47
.53
1993-94
68.0
32.0
.41
.59
1994-95
62.0
38.0
.37
.63
Note:
Distribution of expenditure during 1975/76-1979/80 is based on allocation and for remaining
years it is based on actual expenditure.
12
Nature of Health Expenditure
II.2
As noted before, increase in public expenditure is but only one way to ensure better access
to public health care. A careful expenditure strategy needs to be devised to harness the better
results.
The economic-cum-functional classification of the health expenditure reveals that during
1975/76 to 1984/85 nearly 60 percent of the total health expenditure was "current" in nature,
e.,
i.
refers to consumption expenditure involving expenses on wages, salaries, commodities
and services (Table 6). The remaining 40 percent was for acquisition of fixed capital assets.
In the second half of 1980s when structural adjustment was underway and development
expenditure declined substantially, as high as three-fourth of public health expenditures fell
under the "current" category, and only one-fourth was in the nature of capital spending. There
has been again some change in the composition during the first half of the nineties
(corresponding to ESAF, spanning 1990-1994) with the share of capital expenditure rising to
one-third of the total public health spending.
Thus, historically, the major part of the health expenses has been to meet the operating cost
of the sector and a smaller part devoted to creating the new capacities and/or acquiring the
capital assets, having much bearing on the quality of health care services.
Table 6
Economic-cum-Functional classification
of the Health Expenditure
Current Expenditure
Period
Capital Expenditure
1975/76 to 1979/80
57.3
42.7
1980/81 to 1984/85
57.0
43.0
1986/87 to 1989/90
74.4
25.6
1990/91 to 1993/94
63.8
36.2
Source: BBS, Statistical Yearbooks (various years)
13
II.2.1
Distribution of Revenue Expenditure
A component-wise break-up of health revenue expenditure further clarifies the point just made
(Table 7). In the revenue expenditure, expenses on pay and allowances of the health personnel
and establishment represent the largest item; the share of this item increased consistently over
the years since 1975. During 1975-80 the relative share of this item viz., expenditure
accountable for "pay and allowances" claimed about 50 percent of total revenue expenditure.
While it rose slightly to 54 percent in the early eighties, the matched figure jumped to as high
as 65 per cent during 1986-90 period and remained at that level over the first half of the
nineties.
Another area showing continuous expansion in share in the revenue budget is the civil works
meant for repair and maintenance. Its increase particularly from 1.2 percent during 1986-90
to 5 percent during 1990-95 is remarkable. In shaip contrast, the relative share of expenditure
on medical and surgical requisite (MSR) including drug/medicines, and, other expenses
referring to expenses on gas, water, electricity, transport, tax, telephone etc. including diet for
the in-house patients has declined. The MSR expenditure during 1980-85 was about 23
percent of the total revenue expenditures but it got reduced to 16 percent in 1990-95,
indicating a decline by a margin of one-third. Similarly, the share of "other" expenses was 21
percent during 1980-85 but it reduced to half of that in early 1990s. Hence, over the years,
material support and logistics for health care having much implication for the quality and
efficacy of care got increasingly marginalized. This is consistent with the field level
complaints that one can hear about the deteriorating quality of health care in the public
sector4.
4 In recent years, successive news reports came out in the
press that described the deteriorating conditions of curative
health care in a large number of district and thana level
hospitals (see, for instance, special reports on hospitals in the
major Bengali daily Bhorer Kagoz in 1997).
14
Table 7
Component-wise Break-up of Health Revenue Expenditure
Components
1975/76
to 1979/80
1980/81
to 1984/85
1986/87
to 1989/90
1990/91
to 1994/95
Pay and Allowances
Medical & Surgical
Requisite (MSR)
50.0
20.4
53.8
23.0
64.9
17.3
65.8
16.5
Other Expenses (including
diet)
27.3
21.0
14.0
10.4
Grants
1.8
1.5
1.6
2.0
Civil work
-
.8
1.2
5.3
Source: Ministry of Finance: Grants and Appropriation.
Indeed, these items having some vital importance for the quality of health care have received
least (and declining) attention in all the facilities dispensing health care to the people. The
revenue expenses made by Thana, District, and Medical College Hospitals too have indicated
this feature (Table 8). In all these outlets of health care delivery, the relative expenses on
water, gas, vehicle, electricity, etc. including diet for in-house patients declined substantially
while expenses on salary and allowances (particularly those for establishment) increased over
the past decade.5
On the whole, what can be safely concluded is that resources relevant to
some of the
important dimensions of quality of health care services experienced a decline over the past
decade in all the major health care facilities in the country. In contrast, the component of
salary and allowance of health personnel has claimed an ever increasing share of the current
spending.6
5 Note that MSR expenses in these facilities are allocated
separately from the overall MSR allocation made at the national
level. The principle of allocation of this fund is discussed
later.
6 One may argue that some increse in the salary and
allowance of the health personnel was necessary to provide
incentives. However, we are here talking of a situation whereby
15
Table 8
Component-wise Break-up of Revenue Expenditure of Thana
and District Level Health Care Facilities
and Medical College Hospitals
Salary' of the officer
Salary of the staff
Allowances
Other Expenses
All
Thana Health Complex
1986/87 to 1989/90
1990/91 to 1994/95
9.6
9.2
40.3
44.2
40.0
38.9
10.1
7.7
100.0
100.0
Salary of the officer
Salary of the staff
Allowances
Other Expenses
All
District Hospitals & Dispensaries
13.8
14.6
28.3
31.8
32.3
32.7
25.6
20.9
100.0
100.0
Components
Medical College Hospital
10.9
Salary of the officer
23.4
Salary of the staff
30.4
Allowances
29.2
Other Expenses
100.0
All
Source: Ministry of Finance, Grants and appropriations
II. 2.2
9.9
26.9
36.9
26.2
100.0
Nature of Development Expenditure
The information provided in this subsection is not based on
allocation made in the
actual expenditure but on
revised Annual Development Plan (RADP) of the Ministry of
Planning.7 The picture based on RADP data, as generated below, may thus understate the severity
of the problem.
the issue of appropriate mix of wage and non-wage components of
current
spending
was
ignored
altogether.
The
mix
disproportionately changed in favour of paying salaries rather
than providing access to medicines and/or lab-tests which cannot
but have an adverse impact on the quality of health care. This
explains why in many primary health facilities one finds an acute
shortage of medical supplies.
7 Actual estimates of development expenditures at desired
level of disaggregation are notoriously difficult to obtain from
the existing sources.
16
A component-wise break-down of the health project costs of the 1994/95 RADP shows the
construction component to be the single most important item, claiming the largest share of
development projects (Table 9). About 33 percent of the development budget is spent directly
on construction and civil work, while another 3 percent is spent to procure and develop land
for the construction purpose. Hence, construction related expenses represent about 36 percent
of the total development expenditure. Another 20 percent is spent in salary and allowances,
training, consultancy, tax/duty, and research and evaluation purpose. An equal amount is
represented by the category of ’miscellaneous fund’ which primarily meets the expenses
relating to cost overruns. Set against these, cost of procuring equipment, vehicle, furniture,
ambulance and the likes, would amount to only 14 percent. The matched figure for the
drugs/vaccine supply is even less (11 percent). Thus, in total at most a quarter of the total
project costs of the health sector is spent on items which influences greatly the quality of
health care.
Further break-down of development project costs into various components by different levels
of health care indicates a sharp difference among them (Table 10). Construction accounts for
only about one-fourth of the total project costs under primary health care, followed closely
by that earmarked for drugs and vaccines supply (19%). Understandably, all preventive care
being under development budget, a large part of the cost incurred for drugs and vaccines
supply under the primary health care project would represent vaccine cost and the cost for
other preventive medicines. This is not the case with respect to secondary and tertiary health
care. The share of construction in total project costs represents 60 and 47 per cent,
respectively, for them. In contrast, drugs and vaccines supply account for a meager 1-2 per
cent (Table 10). In tertiary health care project, equipment, furniture, vehicle, ambulance and
similar items constitute a major part of the total cost (34%).
17
Table 9
Major Component-wise Break-up of Projects Costs of
the Health Sector Included in 1994/95 RADP
Component
% of total costs
Pay & Allowances
7.0
Construction/Civil work
33.20
Land/Land development
2.81
Equipment/fumiture etc.
13.78
Training
4.03
Consultancy
1.84
Drug/Vaccine Supply
11.0
CDVAT
5.18
Research & Evaluation
1.06
Miscellaneous
20.10
Total
100.00
Source: Project Documents of the Planning Commission.
18
Table 10
Major Component-wise Break-up of Project Costs included in 1994/95
RADP under Different Programs of the Health Sector
Programs
Component
Primary health
Secondary
health
Tertiary health
Pay & allowances
5.0
1.5
2.8
Civil work/constr.
23.8
47.1
39.7
Land/Land dev.
1.3
13.2
7.6
Equipment etc.
6.7
16.8
33.6
Training
3.4
-
.3
Consultancy
2.7
-
-
Drug/vaccine
19.1
2.1
.9
CDVAT
2.7
13.1
11.1
Research/Evaluation
1.4
-
-
Misc.
-
Source: Project Documents of the Planning Commission
II.3
Resource Distribution into Different Levels of Health Care
Considering thana health complexes and union dispensaries providing primary health care
services to the (rural) people as primary level of health care, district level hospitals and
dispensaries providing curative care and referral services as secondary8 one, and specialized
hospitals and institutions as the tertiary facilities, one can derive the distribution of revenue
expenditure into these different levels of health care. The results are presented in Table 11.
8 This classification is, however, not perfect, as all these
facilities provide primary health care as well.
19
Table 11
Revenue and Development Expenditures by Levels of
Health Programmes
Expenditure/
period
Levels of Health Care/Programmes
—
Primary
Secondary
Tertiary
Revenue Exp
1975/76-1979/80
22.1
n.a
n.a
1980/81-1984/85
28.4
n.a
n.a
1986/87-1989/90
45.3
5.6
16.3
1990/91-1994/95
40.6
5.5
15.4
54.6
12.2
7.0
60.6
17.8
5.7
51.0
11.0
6.8
Development Allocation
(revised)
1980/81-1984/85
1985/86-1989/90
1990/91-1994/95
Source: estimated from itemwise breakdowns given in Ministry of Finance; Grants and
Appropriation (Non-development), and programmes of the health sector given in
Risri
Annual Development Plan.
In commensurate with the national objective of health sector to place greatest emphasis on
primary health care to make health care services affordable and accessible to all, the revenue
expenditure focused mostly on primary health care. Encouragingly, it not only has drawn
more resources but its share over the years has increased substantially. During 1975-80 about
22 percent of the revenue expenditure was on primary health care, in 1986-90 this rose to 45
percent. In the years after 1990, the share has declined by 5 percentage points but yet
remained above 40 percent of the total. The continual expansion of primary health care
facilities in the rural area is responsible for this. The revenue expenditure on secondary health
is about 5-6 per cent of the total expenses while expenses on tertiary health care represent
about 15-16 per cent. Thus, the expenditure on secondary level of health care facilities which
20
have the additional responsibility of providing referral services is least of all. However, the
allocation in favor of primary health care is even more pronounced in the development
budget. During first half of the eighties, about 55 per cent of the ADP allocation is made for
the projects meant for primary health care. The share rose by another 5 percentage point
during the second half of the eighties. In the first half of the nineties, it fell down
substantially although remained more than 50 per cent (51%). Thus, taking both revenue and
development expenditures, primary health care stands out as the greatest beneficiary.
An emerging feature of the health expenditure in recent years is that the expenses on health
care delivery networks viz., primary, secondary, and tertiary health care facilities in general
declined. Service delivery in general is getting lesser priority than before in the overall
expenditure design.
II.4
Distributive Principle for Medical & Surgical Requisite (MSR) and Diet
Allocation
As regards the provision of food or the diet of the patient in the hospital, currently Tk.30 per
patient per day is allowed. Given the price level in the country, this allocation for financing
three meals a day for each patient is clearly inadequate. Hence, although it is being often
alleged that the pilferage, leakage, wastage, and misuse of food are responsible for poor
quality and insufficient quantity of diet supplied in the hospitals, the basic allocation indeed
has remained at a level which is deficient and irrelevant to the need to begin with.
Again, this allocation for patient’s food is done irrespective of the location and the nature of
the hospital viz., it is same for a patient in Upazila hospitals, in Dhaka Medical College
Hospital located in the capital city and in Cardio-Vascular Disease Hospital. Thus, for urbanrural price discrimination as well as for
special food requirement for the patients in
specialized hospitals, the allocation may prove further insufficient in the urban and tertiary
level health care facilities.9
9 This explains why one observes the wide practice of
"bringing food from outside" to meet the patient's food need
which is done privately in violation of the stipulated hospital
practices.
21
It may be worth mentioning that the allocation for medical and surgical requisite (MSR) is
done on the basis of the number of beds available in a health care facility and takes no
account of the out-patients load. Hence, all the Thana Health Complexes which are mandated
to have 31 bed hospitals get the same MSR allocation, even though they may differ in bed
utilization rate as well as in the number of out-patients receiving health care. Thus, the current
allocation principle may not be the appropriate one to rely upon in deciding what proportion
of MSR is to be allocated to individual health facility operating at a given level.
When one considers the allocation of MSR funds across different levels, the following picture
emerges. All medical colleges and specialized hospitals get at tire rate of Tk. 20,000 per bed
per year; the district level hospitals get at the rate of Tk. 18,000 per bed per year, while the
corresponding figure for the THCs is Tk. 10,500 per bed per year. The allocation for other
facilities (such as ward level urban dispensaries, school based clinics, etc) is made on a "per
institution" basis. The urban dispensaries get at the rate of Tk. 70,000 each per year, school
health clinics too get at the above rate. The Union Health and Family Welfare Centres gets
at the rate of Tk. 40,000 each per year. The Central Medical Store gets a thumb allocation
of 20 percent of the total fund for buying equipment, machinery and other capital goods.
Based on the allocative principle as described above, a rough estimate of the distribution of
MSR allocation can be made. This is done for the fiscal year 1997-98 (Table 10). Note that
precise estimates cannot be done as the bed number in different health care facilities is not
known For what it is worth, the table shows that the district hospitals, medical college
hospitals, and the specialized hospitals taken together claim the largest share of the MSR fund.
This is not unexpected since majority hospital beds in the country fall under these. Together
they consume about two-third of the annual MSR allocation. On the other hand, THCs and
UHFWCs which take care of the primary health care in the rural areas get only 17 percent
of the MSR fund. The situation with respect to urban dispensaries (operating at municipality
ward level) and school health clinics is even worse in this (and, perhaps, in every other)
respect: the matched share being less than 1 per cent.
An idea about the inadequacy of the MSR fund allocated to different Thana Health Complexes
may be obtained from an indirect estimate. At the rate of Tk. 10,500 per patient per year, a
THC with 31 bed hospital gets Tk. 3,25,500 on this account. If one assumes 100 per cent bed
utilization rate in a THC, then per (indoor) patient per day MSR allocation would be around
Tk. 29.
It rises to Tk. 38 if utilization of bed is in the order of 75 per cent (which is,
22
perhaps, a more realistic bottom line in the current situation). To remind it again, this estimate
has not considered outdoor patients who are far more greater in number and make claim on
the same MSR fund as the in-patients.
The emerging message is disturbing and it underlines that actual per patient allocation is
meager by any standard. There is a genuine shortage of supply over and above the problems
of pilferage, leakage, and misuse of the medical and surgical requisites at the local as well as
higher level. It is being observed that the supply of medicine available in thana level hospitals
is actually able to meet only one-third of the demand for it (Rahman and Ali, 1996).
Table 12
Distribution of MSR Funds into Different type of Facilities
Type of Facilities
% of total
THC (400)
11.8
UHFWC (1367)
5.0
Central Medical Store
20.0
Urban Dispensaries
.2
School Health Clinic
.2
District level, Med. College. & Specialized hospitals
62.8
Note: estimated from 1996-97 MSR allocation and number of facilities as existed in
1996
11.5
Distribution of Resources to preventive Care
In order to improve the health status of the people particularly in developing countries where
infectious and parasitic diseases dominate the morbidity scenario, preventive health care
possesses an especial importance. Such care provided through appropriate community level
interventions can reduce to a large degree the prevalence/incidence of these diseases in a
population and this is cost-effective as well than the management of these maladies through
23
the curative services. The preventive care thus constitutes a definite element of primary health
care as envisaged in the Alma-Ata conference.
In Bangladesh prior to 1980s, mainstream activities in this regard has been the control of
epidemic diseases; such as, malaria, small pox, etc. From 1980s, with the control of these
diseases, focus has shifted to the control of childhood diseases through EPI, diarrhoeal
diseases prevention, education programmes on nutrition, health, hygiene, etc., with recent area
of addition being AIDS prevention.
Table 13 presents the ADP allocations to preventive care and the revenue expenses made for
this purpose over the last two decades. Prior to 1980, the control programmes of epidemic
disease used to claim about 8 percent of the total revenue expenses of the health sector. But
after the effective control of malaria and small pox through parallel health programmes (which
were under the revenue budget) was abandoned in the 1980s, the revenue expenses on this
coupt dropped sharply. It was less than 3 percent during first half of 1980’s, and about 2
percent in 1985-90, with expenses being really negligible in 1990-95 (0.14%). During 1980’s
and early 1990’s, the expenses under this head is made only for quarantine services installed
in different entry points of the country such as in the air ports, border check posts, etc..
Since 1980, the preventive health programmes became primarily the affairs of development
programmes for health. The proportion ADP fund allocated to this has been about 13 percent
in 1980-85 and 25 percent in 1990-95, thus increased nearly by two times over the last 15
years.
This increasing emphasis on preventive health care while is an encouraging trend, yet, the fact
remains that taking the total revenue expenses and development allocations together, health
sector as of 1990-95 devoted no more than 8 percent of the resources to preventive care.
Considering the fact that still three-fourth morbidity burden of the country originate from
infectious and parasitic diseases which can be effectively prevented through appropriate
interventions, the resource allocation between preventive and curative care indicates a relative
negligence for the prevention of diseases in the country.
24
Table 13
Percent of Revenue Expenses and ADP Allocations
made to Preventive Care
Period
% Revenue Expenses
% ADP Allocations
(revised)
1975/76 - 1979/80
7.9
n.a
1980/81 - 1984/85
2.7
13.4
1985/86 - 1989/90
2.2
23.3
1990/91 - 1994/95
.14
25.3
Source: Ministry of Finance; Grants and Appropriation (non-development)
Revised ADP of the Planning Commission
II.6
and
Allocation of Resources to Non-allopathy Medicines
Although at policy-making level non-allopathy branches of medicines such as, Homeopathy,
Unani, Ayurvedi, etc. were given importance to improve the health care system of the country
particularly in the rural area (see Five Year Plan Documents) they are yet to find adequate
place and recognition in the health sector. Over the last two decades these medicines have
even remained unable to acquire the status of a line item for resource distribution in the health
sector (Table 14). Some resources from budget are made available to them from the head
"Grants in Aid", and during the last 2 decades resources thus made available to them never
reached even 1 percent figure. The ADPs of the country too, incorporate no noteworthy
programmes for the development of non-allopathy medicines. Hence, for all practical
purposes, they have remained a marginal sector and incorporation of them in the mainstream
health care delivery has remained an unrealized and unattended goal.
25
Table 14
Percent of Revenue Expenses made for
Non-allopathy Medicines
Period
% expenses
1975/76 - 1979/80
0.1
1980/81 - 1984/85
0.6
1985/86 - 1989/90
0.9
1990/91 - 1994/95
0.6*
* it has not included expenses during 1994/95
II.7
Other Features of Health Expenses
Delivery of effective and adequate health care services in Bangladesh is handicapped not only
by severe shortage of resources but by the shortages of trained health personnel and support
services. As of 1995 there were 15 doctors and 12 nurses for 100,000 population indicating
that Bangladesh while suffers in general, from non-availability trained personnel, has quite
extraordinary dearth of trained nurses.
However, the revenue expenses made for "medical colleges" and other training schools and
institutions which produce trained manpower in the country reveals that the expenses on them
(medical colleges, not on medical college hospitals) over the last two decades have declined
substantially (Table 15). It was about 7 percent in 1975-80, declined to 3.3 percent during
1985-90 and remained stable thereafter. It is noteworthy that this decline has occurred in spite
of increase in the number of medical colleges. In 1975 there was only 8 medical colleges, 9
in 1985, and rose to 13 in 1995. While one of the reasons for this decline in expenses on
medical colleges may be the expansion of health sector, particularly in the area of primary
health care, yet the fact remains manpower development during this expansion has not
received needed attention. In other words, this has not kept pace with the expansion made in
the health sector.
26
The development allocation is also reflective of this situation. The ADP allocations made for
the programmes for production and training of different categories of health manpower was
IS percent during 1980-85. But, subsequently, in second half of 1980’s it declined to 8
percent. The situation improved somewhat in the early 1990’s but remained still less than the
level of early 1980’s. The ADP allocation during 1990-95 was 12 percent for manpower
development.
As regards manpower development, an important thing to note is that in the health manpower
development personnel other than doctors have received very little attention. During the last
decade, only about 1 percent of the revenue expenses was earmarked for them.
As has already been noted, the share of medical and surgical requisites (MSR) with direct
bearing on the quality of health care in revenue expenses has been very inadequate. The ADP
allocation for the purpose too is not encouraging. The investments or the programmes relating
to production, procurement, supply of drugs, biologicals, and other necessary supplies
constituting support services represented only 5.5 percent of the total ADP allocation to health
during 1980-85 period. It increased slightly to 7 percent during the second half of 1980’s, and
to 9.5 percent during early 1990’s (Table 16). Thus, although there has been an increasing
trend in ADP allocations for support services over the last two decades, the relative share of
it in ADP has been less than satisfactory. However, one point to take note in this connection
is that increasing allocation for support services in the subsequent ADPs may be the resultant
effect of enhanced emphasis on preventive care which almost entirely is the responsibility of
development programmes. The curative services may benefit relatively less from this increased
allocation to support services.
27
Table 15
Expenses/AIlocation for Medical Colleges and
other Training Schools/Institutions
Development
Allocation*
Revenue Expenses
Period
Medical college
Other Tr. schools
1975/76 - 1979/80
6.9
n.a
n.a
1980/81 - 1984/85
4.6
n.a
18.8
1985/86 - 1989/90
3.3
1.2
8.3
1990/91 - 1994/95
3.3
1.2
12.1
* to manpower Development
Source: Ministry of Finance; Grants and Appropriation and Revised ADP
Planning Commission.
cfte
Table 16
ADP Allocations for Support Services
Period
% allocation
1980/81 - 1984/85
5.5
1985/86 - 1989/90
7.2
1990/91 - 1994/95
9.5
Source: Revised ADP of the Planning Commission
28
Ill Distributional Implications of Public Health Spending
III.I Who Benefits from Public Health Spending: A Static Benefit Incidence
Analysis
Whether, and to what extent, social expenditures have been able to reach the poor still
remains an unresolved question. The average allocation figures say nothing about the rural
trend, not to mention the more important issue as to what happened to the access of the rural
poor to such services. This section throws some light on this issue.10
III. 1.1
Measurement Issues
The key objective of the analysis is to evaluate the extent to which public expenditures on
health benefit poorer groups in
rural Bangladesh. "The assessment is based on an "benefit
incidence analysis" of health expenditures in 1994.12 However, a comprehensive review of the benefit
incidence requires that the analysis should consider the simultaneous detennination of the entire tax
and expenditure system, employing the government aggregate subsidy to health as one of the
parameters of the system. Such data are not available to support the analysis. Hence, the focus is made
on the redistributive impact of government expenditures in a partial equilibrium framework. The
purpose of the analysis is to see how the "gross" benefits from government spending (such as health)
are distributed across the various income (expenditure) groups. The analysis will help to address the
issue of re-orientation of public spending.13
10 The discussion presented in this section draws heavily on
Chowdhury and Sen (1997).
11 The exclusion of urban focus is due to the lack of
representative survey data capturing the household "use" of
public educational and health facilities in urban areas.
12 Several studies have applied this analysis earlier in
other country contexts. See, Van de Walle et al (1994), Hammer
et al (1992) , Seldon and Wasylenko (1992) , Dayton and Demery
(1994) , Hausmann and Rigobon (1993) .
13 The analysis requires information on utilization of
public services by different groups of beneficiaries suitably
classified by per capita income (expenditure) . Such information
are often not available from conventional household surveys, and
hence,
some special purpose surveys
(such as a hospital
beneficiaries survey) are usually required. Given the scope, the
study will mainly use whatever information available from the
29
To measure the direct income benefit from public health programs, two types of data are
needed. The most difficult part is to get fiscal information by required level of disaggregation.
Gross allocations on health facilities in
rural areas have been estimated from the macro
budgetary' data. Only revenue expenditures have been considered for the estimation of health
subsidies. These are "higher bound" estimates of subsidy benefits since no allowance is made
for cost recovery'. Besides, rural/ urban breakdown of public health budget does not exists, at
least in readily available form. The calculation of public health expenditures in rural areas
takes into consideration some budgetary items which are not earmarked for exclusive rural
use. Altogether, five items have been considered for public health expenditure analysis as
applied to rural areas: hospital and dispensaries, mental hospital, epidemic control, health
center, and upazilla (thana) hospital. The inclusion of some of the non-rural health facilities
such as district hospitals is valid on the ground that many of the rural patients (suffering
particularly from major illnesses) also make use of such facility, as indicated by the household
surveys.
Information on household "use" of public health services is measured from the unpublished
primary survey data such as those collected by the poverty monitoring project of BIDS (using
the recent 1994 round of survey of 62 villages). Here the relevant indicator at the household
level is the number of annual visits of household members to government health facility. The
survey-based figure of average annual visits per rural person has been used to approximate
the total visits to government health facility by rural population, as recorded in 1994.
Combining this information with macro budgetary data, one can estimate the "gross" subsidy
per (rural) visit to government health facility.’4 Once the estimate of subsidy per health visit is
known, one can calculate the total amount of benefits accruing to various income decile groups using
survey information on the utilization of public health facility by each group.
There are at least two ways of assessing the redistributive effect of public health spending in
the short term. The first consists of evaluating the distribution of spending (i.e., how much
of the total public expenditure is received by each income decile). The second consists of
determining what proportion of each decile’s income is represented by public spending on
existing household surveys on the use of public services.
14
This is estimated to be taka 211 in 1994.
30
health. The progressivity or regressivity of government social expenditures can be analyzed
from both perspectives. The two criteria may not necessarily yield the same result. For
instance, it is possible that the bottom two deciles receive less than 20 per cent of the total
spending on health. However, this transfer can represent, in terms of its income, a larger share
than the share received by the most affluent decile. We have considered both perspectives in
forming opinion about the effectiveness of public health spending in terms of its impact on
equity.
III.1.2
Results
The above observations broadly characterize the distribution of benefits from public health
expenditures as well. We shall only focus on the additional moments revealed in the incidence
analysis as applied to rural public health.
First, as per the current pattern of utilization of public health facility in rural areas, the
highest benefit is received by the fifth income decile (having 17.8 per cent of total transfers).
Households located at the top income decile receive slightly higher amount of benefits
compared with the poorest income decile (13.6 vs 12.8 per cent). However, the emerging
pattern is generally pro-poor (Table 17). The 62-village survey of BIDS conducted in 1994
showed the proportion of rural population living in poverty to be in the order of 52 percent
(Rahman et al, 1996). Accordingly, the share of rural poor in the total stream of benefits from
public health spending would be about 57 per cent which is much higher than the matched
figure observed for income distribution (i.e., 22 per cent).
31
Table 17
Rural Income Distribution and the Distribution of the Benefits
from Government Expenditures on Rural Health: 1994
(Annual figure in taka)
Per capita income
decile
Percent of income
Percent of benefits from public
spending on rural health
1
1.94
12.88
2
3.25
8.86
3
4.11
12.22
4
5.64
3.67
5
6.05
17.84
6
6.91
8.13
7
9.50
8.62
8
12.63
6.87
9
17.38
7.27
10
32.59
13.64
Total
100
100
Note:
Public spending on health considered here includes only current expenditures.
Second, the importance of public health access is particularly revealing for the poorest income
decile. The latter account for only 2 per cent of rural (private) income, but has 13 per cent
of total health benefits.
Third, a comparison of the relative proportion of public and private
health expenditures indicates that benefits through public health still cover only a small part
of the health care demand (Table 18). This is true even for those who are virtually cut off
from the qualified private health care facility such as those provided by the trained doctors
and private health clinics.15 The public component varies from 8 to 36 per cent of private
15 The choice for the most of the rural poor is between
public health care and traditional
(including untrained)
practitioners, while the option for the rich ranges from
inpatient facility in public health centers to having the ability
to access the service of qualified private doctors. On the issue
32
health expenses for different groups of the rural poor (deciles 1-5). This also show the
potential benefits associated with effective expansion of public health programs in rural areas.
The extreme poor households currently allocate 7-10 per cent of their income to cover private
health expenses which is a sizable burden by any reckoning.16 If this burden can be relieved
through greater targeting and provision of public health care, this would have substantial poverty
alleviating effect.
Fourth, certain progressivity is discernible in the distribution of rural public health care.
Benefit from the latter source, as proportion of per capita income, is found highest for the
poorest (2.9 per cent) which declines almost secularly to 0.2 per cent in case of the top two
deciles.
The above results derived under the static benefit incidence analysis as applied to health sector
are based on the assumption that unit costs for obtaining public health services are the same
for the various income levels. This is hardly satisfactory, given the often high transaction costs
involved in getting access to public health care, costs which are likely to be higher for the
poor than the non-poor. Besides, one should also take into account the quality differential in
the service provided by public health bodies to different socio-economic status (SES) groups,
including the difference between poor and non-poor groups. The latter may be measured in
terms of waiting time, adequate attention of doctors, differential access to inpatient and
outpatient facility, access to medical tests, etc. The results relating to certain progressivity in
the -distribution of benefits from public health spending in rural areas thus needs to be
calibrated by taking these transaction costs and quality factors into consideration. The results
from the survey conducted on the beneficiaries of rural health centres under the present study
amply demonstrate the relevance of these left-out factors. To these we shall now turn.
of general health access in rural areas, see Begum (1996).
16 This is just one aspect of the income erosion, The other,
more critical, aspect of it lies in the acute vulnerability of
the poor households to sudden and unanticipated health related
shocks, leading to the loss of income and employment, and
increased indebtedness. Health related shock represents important
determinant of the downward mobility along the poverty spiral.
On this, see Sen (1996).
33
Table 18
Public and Private Health Expenditure Incidence by Per Capita
Income Decile in Rural Bangladesh: 1994
(Annual figure in taka)
Per Capita
Per Capita
Per Capita
(2) as %
(3) as %
(3) as %
income
private
public
of (1)
of (1)
of (2)
health
health
expenditure
expenditure
(1)
(2)
(3)
(4)
(5)
(6)
1
1693.53
173.50
48.71
10.2
2.9
28.0
2
2911.38
202.19
33.51
6.9
1.2
16.6
3
3678.96
208.29
46.20
5.7
1.3
22.2
4
4457.10
170.80
13.87
3.8
0.3
8.1
5
5361.35
187.40
67.46
3.5
1.3
36.0
6
6352.07
205.56
30.75
3.2
0.5
15.0
7
7930.18
194.14
32.59
2.4
0.4
16.8
8
9986.57
251.23
25.97
2.5
0.3
10.3
9
14291.59
297.74
27.50
2.1
0.2
9.2
10
26915.58
626.57
51.66
2.3
0.2
8.2
All •
8317.66
251.11
37.82
3.0
0.5
15.1
Decile
Source:
Calculated from Macro Budgetary and Primary APT Data
Note:
Public health spending includes only current expenditures
34
IV
Summary and Concluding Observations
The present analysis of the financial allocation and distribution of resources
in the health sector including an assessment of incidence of benefit of public
health expenditure that accrues to rural people of different strata led to
several important observations.
As observed, the proportion of GDP spent on health is relatively low in the
country. Taking public and private expenses togather this is little over 3
percent of the GDP while former is not even 1 percent of it. The per capita
spending on health too is very small.
It is only about US$ 2 per annum.
However, following the practices of other developing countries such as Nepal,
India, and China, Bangladesh inspite of having low income base can devote more
resources to health.
Taking revenue and development expenditure togather, roughly 3 to 4 percent
of
the government
expenditure is
spent on health.
During
the period of
structural adjustment in the second half of 1980's this share got reduced
further,
adverse
with
The
allocation.
ADP
effect
being
more
to
health
allocation
pronounced
during
on
those
negligible 1 percent or a figure lower than that. Hence,
the
development
years
reached
a
alike many other
developing countries, the economic adjustment programs of Bangladesh too have
rendered
an
adverse
effect
on
health
particularly
on
the
development
expenditure of this sector.
Historically,
the major part of the health expenses is spent to meet the
operating cost of the sector. Only a smaller part is devoted to creat new
capacities and/or acquiring capital assets. More importantly, over the last
20 years the operating costs in terms of salaries and allowances of the
officers and staff has been increasing pushing the other expenses down. The
most affected heads in the process are:
(a) medical and surgical requisites
(MSR), and (b) expenses on other items most of which fall under the logistic
support including diet for the in-house patients. All outlets of health care
delivery,
such
as,
Thana
Health
Complex
(THC),
District
Hospitsls
and
Dispensaries, and Medical College Hospitals have undergone these changes in
expenditure pattern. Analysis of the development budget too indicated that
they are the minor items of expenditure. Only about one tenth of the ADP
budget is allocated for drugs and vaccine procurement while another 14 percent
for purchasing ambulance, vehicle, furniture, equipments etc.. The major item
of expenditure in ADP is construction and related matters to it.
Indeed, an emerging feature of the recent public health expenditure is that
the delivery of health care services in general, including primary, secondary,
35
and tertiary levels of care, have been getting lesser priority. The share of
expenses on them in the nineties has declined.
In commensuarte with the national objectives, primary health care is getting
priority for resource distribution. The secondary health care is relatively
neglected for this. But for smooth functioning of the referral system which
is the linch-pin of the
primary health care approach, secondary health care
requires balanced development.
Preventive health care has remained another neglected area in the health
sector. Presently, it is taken care of entirely by the development budget and
no more than 8 percent of the total public health expenses is spent on this.
Given the country's disease pattern of mortality and morbidity dominated by
infectious and parasitic diseases, prevention of diseases presumably deserves
more attention. Yet,
pattern
in
the
a caveat is that a perceptible transition in disease
may
country
not
take
place
till
poverty
is
alleviated
substantially. Many of the diseases people suffer from originate primarily
from impoverished and unhygienic life and living of the poor people viz., they
are intricately interrelated with poverty.
Manpower development also has not received appropriate attention it deserves.
Revenue expenses on medical colleges and other training institutions/schools
including development allocation for projects designed for the development of
manpower has declined substantially over the last two decades. Particularly
auxiliary manpower
regard has been the development of
neglected in this
referring to lower level health personnels other than MBBS doctors. Only about
1 percent of the revenue expenses is earmarked for them. Hence, it is not by
chance
that
the
country
has
extra-ordinary
of
dearth
nurses
or
the
quacks/untrained practitioners dominate the rural private health care. Thus,
development of health manpower in the country while should keep pace with the
expansion of the sector, it should give adequate attention to the development
of all categories of manpower too required for a sound public health delivery
system. While doing so it should also address the need of the private sector
as well. It is being estimated that even if existing public health facilities
function in full capacity, government health care facilities can not satisfy
more than one-fourth of the health care needs of the rural people.
Thus,
meeting health care needs of the rural people will continue to depend much on
the
private
sector
and
supply
of
trained
manpower
is
precondition
for
efficient functioning of this sector.
The non-allopathy medicine
for all practical purposes
is yet
a marginal
sector. They are still not a proper line item for claiming resource from the
health budget and receive fund from the 'grants in aid' . Since, substantial
number of people use them and they also can be employed to meet health care
36
needs of the people it is desirable that they are recognized and brought under
the mainstream health care package.
However, as the public health expenditure pattern of the country indicates,
the
largest
chunk of
spent on the
is
it
based on
curative health care
allopathy medicine and most of these expenses are again spent to meet the
operating costs only. Acquisition of assets, building new capacities, support
services,
drugs
and
medicine
supply,
development
manpower
have
been
experiencing not only relative neglect but getting increasingly marginalized
too in drawing resources which possess much importance for the quality of
care.
Another issue viz.,
the current allocative principle of the government for
distributing
national
facilitating
the
MSR
supply
(medical
of
medicine
requisite)
surgical
and
other
and
requisites
activities also requires reconsideration. At present,
different outlets on the basis of number of beds
attention to the bed utilization,
budget
for
for
surgical
it is distributed to
available
and pays no
size of the population or the volume of
outdoor patients it serves. Hence, current principle ignores a significant
part of the reality which determine greatly the ultimate supply of medicine
to the patients. However, that the issue of medicine supply requires an urgent
attention is evident also in a per capita estimate of MSR budget. It is being
observed that even if we allow for 100 percent honesty,
the per person MSR
allocation for indoor patients with 199S-97 budget stands at around Tk.29 only
in a 31 bed Thana Hospital (assuming 100 percent utilization) . As noted above,
this allocation in reality is even lower as outdoor patients claim on this
budget. The present allocation for medicine therefore, is an allocation for
allocation sake only.
The
current
allocative
principle
the
for
diet
as
well
requires
reconsideration. At present, per patient per day allocation for food is Tk.30
only and this is uniformly fixed for all hospitals across the locations and
types. It thus, has considered neither the rural-urban pirce discrimination
nor
special
However,
food
requirement
for patients
in
the
specialized
hospital.
a proper diet policy for the hospitals while requires an upward
revision of the current absolute amount,
requires also accomodation of at
least, special food requirement of the patients.
Finally, it is to note that the public health expenditure in the country is
pro-poor viz.
the poor derive more benefits from this expenditure than the
richer section does. Hence, an increased expenditure on health in the country
is
desirable
on
two
counts.
While
its
pro-poor
nature
will
help
the
alleviation of poverty, it will help the process of economic development also
through the health status of people.
37
References:
Begum Sharifa, 1988; "Status of Primary Health Care in Bangladesh
specially in the Rural Areas"; M.R. Khan (ed.); Evaluation of Primary Health
Care and Family Planning Facilities and Their Limitaions in the Rural Area.
Monograph No.7; BIDS.
-------------------- ; 1997; Health Dimension of Poverty: Hossain Z.
Rahman et.al (eds.); Dynamics of Rural Poverty, 1987-95; University Press
Limited, Dhaka.
BRAC (Bangladesh Rural Advancement Committee) ; 1990; A Tale of Two Wings:
Health and Family Planning Programmes in a Upa-zila in Northern Bangladesh;
Dhaka; BRAC Prokashana.
Chowdhury O.H and Binayak Sen, 1997; Role of Public Expenditure in
Poverty Alleviations in Bangladesh; BIDS, Dhaka (Mimeo).
Dayton, Julia, and Lionel Demery; Public Health Expenditure and the
Rural Poor in Kenya, Education and Social Policy Department; World Bank;
Washington; D.C., 1994.
Hammer, Jeffrey S., Ijaz Nabi, and James A. Cercone, Distributional
Impact of Social Sector Expenditures in Malaysia; Paper presented at the World
Bank Conference on Public Expenditures and the Poor: Incidence and Targeting;
World Bank; Washington, D.C., 1992.
Hausmann, R. and Roberto Rigobon (ed.); Government Spending and Income
Distribution in Latin America; Inter-American Development Bank, Washington,
D.C., 1993.
Kawnine et.al; 1995a; A Public Expenditure Review of the Health and
Population Sectors; Working Paper No.l; Health Economic Unit; Ministry of
Health and Family Welfare; GOB, Dhaka.
; 1995b; An analysis of the Recurrent costs in GOB
Health and Population Facilities; Working Paper No.2, Health Economics Unit,
Ministry of Health & Family Welfare; GOB; Dhaka.
; 1996, User Fees, Self-selection, and the Poor in
Bangladesh; Research Note 5; Health Economics Unit, Ministry of Health &
Family Welfare; GOB; Dhaka.
Ministry of Finance; Revenue Expenditure in Demand for Grants
Appropriations (Non-Development);(Various Volumes).
and
38
Rahman, Rushidan I, and Kamar Ali, 1996; Structural Adjustment Policies
and Health Care Services; Glimpse from Two Villages in Bangladesh;
UNFPA/CIRDAP, Dhaka.
Sen Binayak, 1996; Economic Growth and Human Development in Bangladesh,
1973-95; The Journal of Social Studies; October, 1996.
World Bank; 1993; World Bank Development Report
Health; New York; Oxford University Press.
1993:
Investing in
39
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“Macroeconomics,
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ADDRESS FOR CORRESPONDENCE REGARDING THIS DOCUMENT
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Printed in 1998 by WHO
Printed in Switzerland
CONTENTS
I. Do the poorest warrant specific analytical and policy focus ?............................................... 1
II. Targeting principles underlying indicator choice.................................................................. 8
III. Identifying the poorest and most vulnerable...................................................................... 10
IV.
Targeting the urban extreme poor .................................................................................... 23
V.
Ill-health and extreme poverty: a close correlation?......................................................... 24
VI.
Process issues.......................................................................................................................25
VII Conclusion............................................................................................................................. 27
TABLES:
TABLE 1 : Estimates of poverty in rural area by possession of minimum two clothes .... 11
TABLE 2 : Estimates of poverty in rural area by possession of warm clothes ................... 11
TABLE 3 : Estimates of poverty in rural area by sources of drinking water....................... 11
TABLE 4 : Estimates of poverty in rural area by toilet facilities for under 10 children ... 11
TABLE 5 : Estimates of poverty in rural area by gender status of household head............. 12
TABLE 6 : Estimates of poverty in rural area by education of household head ................. 12
TABLE 7 : Estimates of poverty in rural area by tenancy status......................... ;.............. 13
TABLE 8 : Estimates of poverty in rural area by landownership.......................................... 13
TABLE 9 : Estimates of poverty by different housing categories in rural area................... 14
TABLE 10 : Estimates of poverty in rural area by occupation............................................... 14
TABLE 11 : Trend in poverty by major occupational category, 1983/84 - 1991/92 ............. 15
TABLE 12 : Distribution of agricultural labor households by type of housing ................... 18
TABLE 13 : Incidence of poverty among agricultural labor households by housing
category................................................................................................................... 18
TABLE 14 : Estimates of poverty by type of housing among rural landless
(<.50 acre of land) households............................................................................... 19
TABLE 15 : Distribution of households by type of housing and landownership................. 20
TABLE 16 : Incidence of extreme poverty by occupation controlling landholding size,
1989-90 ................................................................................................................... 21
TABLE 17 : Estimates of poverty in rural area by infrastructure.......................................... 22
TABLE 18 : Estimates of poverty in urban area for selected socio-economic groups .........29
TABLE 19 : Estimates of poverty in urban area by the level of education of the
household head and the spouse.............................................................................30
TABLE 20 : Estimates of poverty in urban area by occupation of the household head .... 31
TABLE 21 : Morbidity rate by extreme poor identifying indicators (landownership,
housing and occupation)
.......................................................... 32
ANNEX TABLES :
Table 1 : Movement in and out of the poverty, 1987-90 .......................................................... 33
Table 2 : Estimation of poverty by types of housing among marginal landowners
(0.50-1.49 acres)........................................................................................................... 34
Table 3 : Estimates of poverty by types of housing among small landowners
(1.50-2.49 acres).........................................................................i,...............................................34
Table 4 : Incidence of poverty and % of poor households by types of housing among
medium landowners (2.50-4.99 acres)......................................................................... 35
Table 5 : Incidence of poverty and % of poor households by types of housing among
large landowners (5.00 + acres)................................................................................... 35
I. Do the poorest warrant specific analytical and policy focus?
Why should the poorest specially matter, as distinct from the concerns about the state of poverty
in general? Should the poorest be helped out first or should the poor still get priority as- a
"second-best" choice? Are the extreme poor capable of responding to the policy interventions,
be they in the area of growth promotion, micro-credit or public health? These are some of the
questions that provide the rationale for undertaking a study on methodology for identifying the
poorest.
Early poverty thinking on some images of the poorest
The poor are not homogeneous. A sharp division exists among the poor, by age, sex, ethnicity,
region, occupation, shelter, land, education, health, even clothing. The gap between the poor and
the poorest has long been a source of policy concern. As early as 1840, Antoine Buret, the French
economist, wrote about the need for constructing the "tableau of poverty" along with the
physiocratic "table of wealth". Firmin Marbeau, who wrote one of the earlier treaties on
pauperism in nineteenth century France, was particularly concerned about the state of the poorest,
by saying that "in a well-governed State, poverty must not degenerate into indigence. It is in the
interests of the rich as much as of the poor that this should be so" (Procacci 1991).
Writing about the livelihood conditions in Faridpur in 1910 Bangladesh, J. C. Jack noted that the
population seems to be divided into four categories: in comfort, below comfort (but above ■
hardship), above indigence and indigence.1 While the first category roughly corresponds to the
contemporary equivalent of "non-poor" (those staying above the poverty line, or what Jack
termed as line of "Physical want"), that proportion stood at 49 per cent in 1910. The other three
categories capture successive gradations of poverty: the matched proportions being 28, 18, and
5 per cent, respectively.2 Jack was keen to observe that these distinctions are robust to various
socio-economic criteria and not derived under income/expenditure-based measures alone. His
methodological position, stated over 80 years ago, is worth quoting in full because of
contemporary relevance:
1 J. C. Jack's study was the first of the kind on the well-being and poverty in India under Raj, based on income and
expenditure survey data. The study was finished a week before his untimely death in 1915 during the first world
war. It provided insights into a number of areas. Here we discuss the aspects relevant to the present discussion only.
2 The average income per head (in 1910) was calculated at rupees 60 for those "in comfort", rupees 43 for
those "below comfort", rupees 34 for those "above want", and rupees 27 for those "in want”.
1
"For easy comprehension ... four classes were adopted, representing varying material
conditions between comfort and actual want, to one of which each family
was
allocated. The classification was not made upon figures of income or expenditure, but
always upon an inspection of the family and the family circumstances in its own
homestead. Only such families as were well-housed} well-fed, well-clothed according
to the evidence of the eye, were permitted to be classified as living in comfort. By such
a safeguard it was intended that the method of enquiry should be thoroughly practical,
avoiding anything academic or mechanical, but ensuring accuracy by concomitant
statistical investigation (Jack 1916)."
The gap between the poorest and the rest is often difficult to quantify in the income dimension,
given the very nature of existence of the former, often as socially excluded beyond the pale of
routine social exchange. As J. C. Jack noted, while in the average the statistical "figures of
income probably represent correctly the facts", the income of the indigent families is "often so
precarious and so largely made up of charity as to be impossible of exact calculation". Here
qualitative impressions, or imagery, may be more useful.
The imagery of poverty, as reflected in the literature, is often instructive in deepening
understanding of poverty. Images help to cross-check statistics. Such imagery can be of help in
forming an idea about who the poorest are. To quote one such depiction by Somerset Maugham:
"It was the peasant, terribly emaciated, with nothing to cover his nakedness but a rag
round his middle the colour of the sun-backed earth he tilled, the peasant shivering in
the cold of dawn, sweating in the heat of noon, working still as the sun set red over the
parched fields, the starveling peasant toiling without cease in the north, in the south, in
the east, in the west, toiling all over the vastness of India, toiling as he had toiled from
father to son back for three thousand years when the Aryans had first descended upon
the country, toiling for a scant subsistence, his only hope to keep body and soul
together."
Several aspects stand out from the above passage: chronic starvation and hunger, severe
deprivation (even in terms of minimum clothing), drudgery, barely persisting at or below
subsistence level, poverty carried over successive generations. We shall examine some of these
aspects later, as part of discussion on "poor-identifying indicators".
Jack's study noted considerable differentiation among the poor. Some of the latter displayed
"poverty only in the quality of their houses and their clothes", while for others it was a clear case
2
of undernourishment? Added to this was the heterogeneity in occupation, with "weaver working
desperately for a subsistence in a declining market, the anxious fisherman with a precarious
catch" and "petty trader with his uncertain profits" and "the rude unskilled labourer earning when
in work far more than his simple needs require". It follows that occupation deserves special
attention in the subsequent examination of indicators. Another aspect that stands out is the
emphasis of Jack's study on the gender dimension to poverty and vulnerability:
"With few exceptions, those families which will be found in chronic need in any Eastern
Bengal village will on enquiry prove to be either widows left with a family of young
children or old people who are past work and who have no relatives to support them".
In short, many of the currently in vogue concepts of poverty (some of which will be discussed
in the paper) can be traced back to earlier thinking on poverty in Bengal and can be of help to
develop relevant indicators for poverty monitoring and policy choices.
Differentiation statistics
Poverty trends show little change over the 80 years since J. C. Jack wrote his book. According
to his estimates, 51 per cent of the rural population in Eastern Bengal (Faridpur) lived in absolute
poverty in 1910; the matched figure for 1994 obtained from the 62-village survey of BIDS is
estimated to be 52 per cent. The lowest two categories in Jack's classification correspond to the
category of extreme poverty ("above indigence" and "indigence") and represented 22.3 per cent
of rural population in 1910. In 1994, the matched figure was 22.5 per cent. Despite the'
difficulties in making comparisons over such a long period, the extent of similarity in poverty
situation is striking.4
The existence of extreme poverty (defined in the dimension of income/ expenditure) can be
verified through three major measurement approaches:
using information on calorie
consumption (so-called direct method), using data on income/ expenditure (so-called indirect
3 Jack could easily see the difference between income-poverty and other dimensions of poverty, a point came to
be recognised in the poverty literature only in the recent period.
4 In contemporary definition, "extreme poverty" cut-off mark corresponds to per capita daily intake of 1805 calories,
while that for "moderate poverty" relates to the intake level of 2112 calories (unless otherwise mentioned this is the
definition followed through out the paper). Both the types form sub-groups of absolute poverty. Note that J. C.
Jack's classification is also based on certain implicit minimum consumption norms, as we read: "The Famine
Commission, in considering the daily subsistence, took three-quarters of a ser (1 and 1/2 lb) per head of husked rice
as the amount required to keep a family of a cultivating classes physically fit". But, Jack was more sensitive to asset
and other non-income dimensions in ascertaining the level of poverty in a household than many of the researchers
doing poverty studies today.
3
method), and directly asking households to self-classify themselves into poor/ non-poor
categories (so-called qualitative method). These approaches often give contradictory trends
(across time or space) and opinions vary as to which one to be used.5 Here we are mainly
interested to note that all three approaches point to the large magnitude of extreme poverty.
The unpublished data for the most recent HES (1995/96) allow to construct poverty estimates
by the direct calorie intake method. Following this approach, one may identify several layers
among the poor. BBS, for instance, considers two extreme poverty lines: one corresponds to
1805 calories per day per person (i.e., about 85 per cent of the absolute poverty line of 2122
calories per day per person); the other line corresponds to 1600 calories per day per person (i.e.,
about 75 per cent of the absolute poverty line). Despite the arbitrariness involved in ascertaining
the two extreme poverty lines, it relays an alarming message.
The proportion of population failing to meet the 1805 calorie norm in rural area is as high as 24
per cent; the matched figure for urban area is still higher (27 per cent). Even if one takes 1600
calories per day person as the cut-off mark for severest poverty, the proportion of rural
population living below that line would be 14 per cent (15 per cent for urban area). The weight
of extreme deprivation in the aggregate poverty is alarmingly high. Thus, as a proportion of total
rural poor in 1995/96, rural extreme poor population was as high as 52 per cent; again, rather
strikingly, the corresponding weight for urban area is even higher (57 per cent).
The same trend emerges when one considers income/ expenditure survey data. A BIDS survey
of a nationally representative rural sample of 62 villages provides a recent estimate of rural
poverty measured in the income space.6 It reveals that about 52 per cent of the rural population
lived in absolute poverty in 1994. This poor population is divided into two distinct groups-
moderate poor (29 per cent) and extreme poor (23 per cent). In other words, in 1994 about 44 per
cent of the poor population fell into the category of the poorest and most vulnerable.
The above picture of wide gap between the poor and the poorest is also confirmed by the
perception survey. According to the self-categorization of the respondents of the BIDS survey,
in 1994 the number of rural households who lived in "chronic deficit" throughout the year was
19 per cent, while households facing "occasional deficit" stood at 32 per cent. This again shows
5
There is growing body of literature on the issue. For a Bangladesh-specific survey, see Ravallion and Sen (1996).
‘Unless otherwise mentioned, the rural estimates of indicators presented in the paper relate to the 62-village data
generated by the Analysis of Poverty Trends (APT) Project of BIDS. Such data are collected for three points in time,
i.e., 1987, 1989/90, and 1994. We have used the 1994 survey data
in this paper.
4
that the overall weight of extreme poor in total rural poor population is considerably high (37 per
cent).
Chronic and transient extreme poverty
Differentiation within the poor does not imply any lack of fluctuation in poverty. Panel data
generated for other countries reveal considerable movement in and out of poverty, particularly
between extreme and moderate poverty.7 Bangladesh is no exception to this, as indicated by the
62-village panel data generated by the Analysis of Poverty Trends (APT) project of BIDS. To
illustrate the point, one may refer to the movement of households in poverty between 1987/88
and 1989/90 (annex table 1). Three aspects merit attention here.
First, 42 per cent of the households classified as extreme poor in 1987/88 continued to persist in
extreme poverty during 1989/90. They constitute 10 per cent of rural households in 1989/90, and
represent the segment of chronically extreme poor with little chance to escape from even the net
of extreme poverty.
Second, about a third of the households who were termed as moderate poor during the first
survey slipped into extreme poverty by the second survey. Such slippage is often viewed as
being stochastic in nature because of their association with temporary fluctuations in crop output
under rainfed agriculture; but, this may not be true in other cases. The slippage may turn out to
be of longer-term nature, as in the event of sudden death of a principal earning member, or some
unanticipated crisis events involving damage of bullock power, ownership disputes leading to ■
litigation, high social ceremony expenditures (raising dowry for daughter's marriage, for
instance) or (frequently) health hazard-related risks which impose substantial coping costs not
only on the poor, but also on the vulnerable non-poor.8
Third, the panel data show the considerable presence of transient extreme poverty: some 28 per
cent of the extreme poor graduated to moderate poverty and another 30 per cent were actually
able to cross- at least for the given spell- over the poverty line. This is an antidote to the
pessimism often articulated in the development policy discourse regarding the alleged inability
of "development" to reach out to people living in extreme poverty. But, again, the fact of
movement in and out of extreme poverty should be calibrated by the fact that such movement
itself may have been measured in narrowly defined space, i.e., current income (which is
susceptible to annual fluctuation in the agrarian economy's context). Had we used more durable
7 For a recent summary of cross-country panel data, see Baulch (1996).
8 The issue is discussed elsewhere in some details. See, Rahman (1995), Sen (1996).
5
indicator of permanent income, the observed fluctuation would have been much less.9 In short,
the fact of movement in and out of extreme poverty should not discount the principal issue at
stake, to wit, "development" must begin with the poorest. The latter should be accorded first
priority.
Reducing extreme poverty is goodfor subsequent growth
The concern for the poorest is not just an issue of social justice or of moral judgment (though
separation of ethics from economics was inconceivable in the days of classical political
economy). Recent advances in development theory suggest that a better distribution is also
instrumentally important to achieve higher economic growth, faster rate of poverty reduction,
and higher social capital.10 A pro-poor distribution policy does not advocate income transfer: it
strives to transform the poor from passive recipients of aid into active agents of high-quality
growth. By "distribution" one is here implying the distribution of physical capital (recall land
reform in countries of the East Asian miracle, for instance) as well as human capital (broad-based
access to education, health, and nutrition). This is the consensus, the meeting point of literature
developed in connection with "new growth theory" and human development.”
Should the differentiation argument be stretched so far?
A legitimate question can spring up here: is too much emphasis given to the issue of reaching
out to the extreme poor, given that the ultimate purpose is to target health care and prevention
to poor and vulnerable populations in general? After all, today's moderate poor may turn out to
be tomorrow’s extreme poor, because of health hazard or otherwise unanticipated events. There
is some truth in it, but the point should not be overstretched. While both moderate poor and
vulnerable non-poor may suffer from health-related shocks, the burden of coping is
disproportionately high for the poorest. The magnitude of the income erosion threat arising out
of unanticipated crisis accounts for 27 per cent of extreme poor households income compared
with 22 per cent for the moderate poor and 13 per cent as applied to non-poor (Rahman 1996).
The vulnerability in raising crisis coping money is also much greater in case of the poorest than
9 When measured along asset-scale (such as land), the movement in and out of extreme poverty becomes
much more restrictive.
10 Social capital- a term coined by Robert Putnam- is increasingly being recognised as a catalyst of good
governance and social development. The relevant point to note here is that it is difficult to achieve a higher level
of social capital in a society where inequality is acute and a substantial number of extreme poor exist on the
verge of social exclusion.
11
For a recent review, see Ravallion (1996).
6
other groups, the former being cut-off from the option of soft credit mobilisation and deprived
of the advantage of possessing some tangible assets (as in the case of moderate and non-poor).
Again, this is not to say that programme interventions (such as in the area of health) currently
in existence for the moderate and vulnerable non-poor are to be ignored in view of the recent
emphasis on the extreme poor. This would be tantamount to saying that-to borrow an example
at hand- microcredit a la Grameen should be abandoned, or radically recast, given its exclusion
of the extreme poor. But we should be worrying about the fact of systemic exclusion and try to
do something specially for the left-outs by way of providing better access to capital, both
physical and human. Such intervention is needed to "correct" the credit market failure which
remains insensitive to the need of the extreme poor, and would be perfectly consistent with
pareto improvement considerations. As applied to health, therefore, the concern for the poorest
should be seen as stimulating special efforts additional to the task of re-vitalising the union
based health services accessible to the total population.
The preceding discussion points to the importance ofrecognising the case for extreme poverty
as an area of specific analytical focus (as distinct from the general concern about poverty and
deprivation). The burden of emerging numbers who live chronically in extreme poverty is too
large to ignore it. The moot question is: how to visibilise the poorest and most vulnerable in the
arena of public policy? How to devise indicators that can identify them with relative ease, but
at the same time will ensure substantial coverage of extreme poverty? To these issues we shall
now turn.
7
IL Targeting principles underlying indicator choice
Before we proceed to discuss the indicators and their estimates for rural and urban Bangladesh,
a few remarks on the methodological issues relating to the choice of indicators would be in order.
Some basic principles of targeting which merit consideration in devising indicators are
mentioned below.
The indicator should aim at capturing broad group characteristics (group poverty) rather than
focussing on individual targeting (Lipton 1996). Poverty analysis does not allow to select
individuals for programme benefits; if that is done-as in the case of some anti-poverty programs
such as India's IRDP or Sri Lanka's Janasaviya- it gives incentives to provide wrong
information, much higher proportion of leakage, but more importantly stimulate changes in
behaviour tending to reduce labour income in order to achieve programme benefits (Besley and
Kanbur 1993). Such problems become even more difficult when it comes to demarcating extreme
poor from moderate poor. But if one can establish that households with particular characteristics
are likely to be (say, extreme) poor, then one can target anti-poverty projects on these groups
(indicator targeting), or on commodities or employment that they are likely to select (self
targeting, as for instance, in Food-for-Works and Vulnerable Group Development schemes in
Bangladesh). Since health care is not a product which is likely to self-select, the second option
for targeting may be ruled out.12
Cost-effectiveness consideration is another reason why one should prefer group targeting to
individual targeting. To steer project benefits towards individuals would require prohibitively
costly nation-wide surveys over and above the problem of under-reporting of income/
consumption. In short, the central principle is to identify groups (along with the characteristics
ofpersons in such groups) with high probability ofbeing in poverty, so that projects, programs
andpolicies may be cost-effectively targeted to groups with severe poverty, rather than others.
Note that the concept of "group targeting" includes not only household parameters, but also
characteristics of geographic region where they are located. The concept is also sensitive to
seasonal variation whereby particular periods display high intensity of distress. Targeting
regionally under imperfect information is to be termed as best practice, especially from the
vantage point of minimisation of severe poverty (provided such zones of distress are known
12 This is not to say that there is no scope for bridging between a public health programme targeted specifically at
the extreme poor and other rural works type programs that tend to self-select them. There can be considerable
informational efficiency in tying the beneficiaries of both type of programs (more on this in the last section of the
paper).
8
beforehand) and studies show that errors of targeting are much less than in case of individual
targeting. The problem is that our knowledge about the variation in poverty rates across space
in Bangladesh is still very limited to be a firm guide in practice, despite some recent attempts in
doing that (GoB 1991; WFP 1996; Ravallion and Wodon 1997). Our approach would be one of
combining insights derived from household-characteristics based poverty profile as well as
analysis of the regional (and seasonal) dimensions to poverty.
Another important principle is that the indicator(s) for targeting should be not only effective in
minimising leakage to non-poor (or richer among the poor, for instance), but also in ensuring
broad coverage of the target group (in our case, reaching the poorest with health care).13 The first
aspect, which focusses on the targeting ability (how sensitive is the given indicator in identifying
the target group?), may be viewed as the necessary condition in order to be selected as a targeting
indicator. The second aspect, which focuses on the representativeness issue (how effective is
the indicator to reach the maximum numbers of the target group?), may be termed as the
sufficient condition. Certain indicators may be good from the first point of view, but fail to meet
the second criteria, being too restrictive.14 The reverse example is also abound. Some of these
examples are discussed below with actual poverty data.
13 This is analogous to the distinction between Type-I and Type-11 errors referred to in the targeting literature (see,
for instance, Stewert and Comia 1994.
14 Consider the following example. Suppose, there exist two indicators with identical probability of locating
the extreme poor (i.e., both the indicators give similar incidence of extreme poverty). However, following A,
one can reach at most 10% of the extreme poor, while using B, one can cover at least 40%. Clearly, B is to be
preferred to A for indicator targeting.
9
III. Identifying the poorest and most vulnerable
Our method of investigation proceeds as follows. We start from an initial choice set of indicators,
examine their targeting ability to predict the incidence of extreme poverty (necessary condition),
assess their representativeness (sufficient condition). After giving due attention to practical
considerations of easy implementability, we finally come up with the preferred variant of core
indicators.
Some indicators are expressive of extreme poverty, but remain restrictive to only a small part
ofit
Indicators such as possession of minimum clothes, access to "safe"15 drinking water and
sanitation fall under this category (Tables 1 through 4). These indicators meet the first criteria
of targeting ability, but not the second criteria, i.e., cover only a small part of the target
population. For instance, 57 per cent of rural population without a minimum of two clothes are
extreme poor compared with 24 per cent for those who have such access. But, the indicator
covers only 4 per cent of total population (and only 8 per cent of total extreme poor). The same
applies to the indicator of possession of warm clothes. Access to drinking water varies by poverty
status; the incidence of extreme poverty is higher for those who do not have access to tubewell
water compared with the category who have such access (34 vis-a-vis 26 per cent). Again, the
indicator is very limited in scope, addressing only 4 per cent of rural inhabitants. The relative
merit of sanitation as poverty-sensitive indicator is better on this score: considerably higher per
cent of the under 10 populations using open space fall under the category of extreme poverty.
The incidence of extreme poverty is 35 per cent in this case compared with only 10 per cent
recorded for the sanitary/slab category. Users of open space constitute as high as 79 per cent of
extreme poor. Nevertheless, the indicator has obvious disadvantage; use of sanitary facility is not
just a question of income status, but also one of the attitudes influencing the non-poor as well.
The latter explains why only 22 per cent of the rural households use.the sanitary facility even
though the share of non-poor is roughly 50 per cent. In short, targeting by this indicator will
result in considerable leakage to the non-poor and moderate poor.
15 The safety of "tubewell" water remains highly suspect, however. The case of arsenic contamination is a recent
addition to the safety concerns over the tubewell water (see, Yokota et al 1996).
10
Table 1: Estimates of poverty in rural area by possession of minimum two clothes
Possession status
Incidence of poverty
%of
population in
the category
Moderate
Extreme
% of poor people
Extreme
c*
Moderate
Possess minimum clothes
96.5
24.0
27.8
92.0
96.6
Do not possess minimum
clothes
3.5
57.2
27.2
8.0
3.4
Table 2: Estimates of poverty in rural area by possession of warm clothes
Possession of
warm clothes
%of
population in
the category
Incidence of poverty
% of poor people
Extreme
Moderate
Extreme
Moderate
Possess warm clothes
93.3
22.7
27.8
84.2
93.4
Do not possess warm clothes
6.7
59.7
27.6
15.8
6.6
Table 3: Estimates of poverty in rural area by sources of drinking water
Sources of drinking water
Incidence of poverty
% of
households in
Extreme
Moderate
the category
% of poor people
Extreme
Moderate
Tubewell
96.2
26.1
28.3
96.8
97.6
Others
3.8
34.4
28.1
3.2
2.4
Table 4: Estimates of poverty in rural area by toilet facilities for under 10 children
Toilet facilities
%of
Incidence of Poverty
households
Moderate
in-the category Extreme
% of poor people
Extreme
Moderate
Sanitary/Slab
22.4
9.8
17.0
4.7
8.2
Katchha
52.4
26.4
31.9
16.4
19.5
Open space
25.2
35.1
31.7
79.3
72.1
11
The number, however, should not be the ultimate criteria for inclusion in the list of core
indicators. Some indicators may be limited in coverage but may speak of additional dimensions
of vulnerability, such as gender, caste and ethnicity. We have some data on gender to illustrate
the point. Female- headed households display much higher incidence of extreme poverty
compared to their male-headed counterparts (37 as opposed 22 per cent). However, the overall
weight of such households is quite low-only 5 percent- which bars its widespread application
(Table 5). However, the number should not detract our attention here from the substantive point
of gender experience of poverty and vulnerability.
Table 5: Estimates of poverty in rural area by gender status of household head
%of
households
in the category
Extreme
Moderate
Female-headed
5.0
37.3
62.7
Male-headed
95.0
21.8
78.2
Gender status
Incidence of poverty
Some indicators are analytically relevant as determinant ofpoverty, but less sensitive to the state
of extreme poverty
Indicators such as literacy and land tenure fall under this type. While there is no denying that
level of educational attainment matters in determining long-term poverty, it does not satisfy the
first criteria of targeting ability. It is true that the incidence of extreme poverty is higher for the
illiterate group, but so is the incidence of moderate poverty (Table 6). This is expected given high
level of adult illiteracy in general. The same applies to the targeting ability of by tenancy status.
The variation among the tenure groups is less pronounced (Table 7). These two indicators can,
therefore, be dropped for the purpose of identification of the poorest.
Table 6: Estimates of poverty in rural area by education of household head
Incidence of poverty
Education
Extreme
Moderate
Illiterate
32.1
34.2
Attended Primary
16.6
29.9
Attended Secondary
10.8
22.5
SSC (Second, school certif.)
8.8
1.5
HSC + (Higher sec. school
certificate)
0.0
12.3
12
Table 7: Estimates of poverty in rural area by tenancy status
Incidence of poverty
Tenancy status
Extreme
Moderate
Non-cultivator
38.5
34.2
Pure tenant
24.6
40.7
Tenant-owner
22.8
30.9
Owner-tenant
13.3
34.4
Pure owner
12.7
22.4
Some indicators capture the poorest successfully, albeit, allow some leakage
Three indicators stand out prominently: land, housing and occupation (Tables 8 through 11).
Targeting functionally landless households (up to 0.5 acre) for poor-targeting has by now been
established as a long tradition, particularly in the context of microcredit. Indeed, the functionally
landless category contains 71 per cent of the rural households in extreme poverty. But, then, not
all households within this land-size group can be termed as extreme poor; about 57 per cent of
moderate poor households also belong to this category (Table 8). There are non-poor households
in the smaller land-size groups as well (Ravallion and Sen 1994). In short, land alone will not
suffice for the targeting purpose.
Table 8: Estimates of poverty in rural area by landownership
Landownership
(acres)
%of
households in
the category
Incidence of poverty
% of poor households
Extreme
Moderate
Extreme
Moderate
<.50
48.6
38.3
33.3
71.0
57.2
.50-1.49
21.4
23.1
31.7
18.8
23.9
1.50-2.49
12.2
14.3
23.0
6.7
9.9
2.50-4.99
11.4
5.3
17.3
2.3
7.0
5.00 +
6.3
4.8
8.4
1.1
1.9
Total
100.0
26.2
28.3
100.0
100.0
13
Table 9: Estimates of poverty by different housing categories in rural area
Housing category
%of
Incidence of poverty
households
Moderate
in the category Extreme
% of poor people
Extreme
Moderate
Jhupry
' 1.6
63.6
27.3
4.1
1.6
One room thatch
23.5
44.0
33.7
39.4
28.0
1 -j- room thatch
13.1
34.1
35.8
17.1
16.7
Tin made house
54.3
17.6
25.5
36.5
48.9
Pucca house
7.5
10.5
18.9
2.9
4.8
Table 10: Estimates of poverty in rural area by occupation
Major occupation
%of
households
in the
category
Incidence of poverty
% of poor people
Extreme
Moderate
Extreme
Moderate
Cultivator
41.6
20.6
24.4
33.2
39.5
Agricultural wage labour
18.5
46.7
40.2
37.3
22.8
Non-agricultural wage
labour
2.7
24.3
34.6
2.6
2.2
Rural industry, informal
service, etc.
7.0
26.5
38.5
7.3
6.2
Trade
10.4
9.3
29.6
4.0
12.4,
Transport
4.5
22.3
34.0
4.9
5.1
Construction
1.8
36.5
34.6
2.6
3.0
Salaried service
9.5
4.7
14.7
2.0
4.8
Others
5.8
27.6
19.7
6.1
4.0
14
Table 11: Trend in poverty by major occupational category, 1983/84 -1991/92
% of poor population
Major Occupation
1983/84
1988/89
1991/92
Owner Farmer
25.20
19.19
24.06
Tenant Farmer
53.20
36.47
37.33
Agricultural Labourer
62.50
66.82
71.04
Trader
43.73
37.63
41.44
Non-agricultural Labourer
58.67
40.73
50.42
Formal sector Service-holder
32.52
17.63
13.77
Rural Industry Worker
52.37
47.94
40.42
Fisherman
43.36
35.25
60.07
Others
52.95
56.86
51.73
Source: Sen (1997)
Housing is another indicator which is strongly expressive of extreme poverty. The incidence of
extreme poverty residing in the lowest two categories on the housing scale ranges from 44 to 63
per cent, and together they account for about 44 per cent of extreme poor households (Table 9).
However, this is also not without problems: about 37 per cent of extreme poor households live
in the tin category.16
The indicator of occupation deserves special mention here. The incidence of extreme poverty is
highest in case of agricultural wage labor. According to the BIDS survey, 47 per cent of
agricultural wage labourers fall under the extreme poor category (Table 10). In terms of poverty
ranking, they are followed by construction (37%), rural industry and informal service (27%),
non-agricultural wage labourer (24%), transport workers (22 %). The observation relating to the
highest incidence of poverty among agricultural labourers is also vindicated by Household
Expenditure Survey (HES) data generated by the Bangladesh Bureau of Statistics (BBS).
According to the latter source which uses consumption data, the incidence of absolute poverty
“It is possible that tins obtained through relief under various disaster mitigating and housing programs contributed
to this anomalous outcome.
15
(extreme and moderate taken together) in the agricultural labour group was 71 per cent in
1991/92 (Table 11). This may be compared with the 87 per cent combined figure derived under
the BIDS survey using income data. In terms of overall poverty ranking in 1991/92, agricultural
labourers are followed by fishermen and non-agricultural labourers, having an headcount index
in excess of 50 per cent; On the other end of the spectrum, the lowest poverty is reported by the
formal sector service holders (14%), owner farmers (24%) and tenant farmers (37%). Rural petty
traders and industrial owners/ workers occupy an intermediate position. The poverty ranking
(particularly for the highest and lowest poverty groups) varies little with the change in the survey
year, implying the stability of the indicator under consideration.
Targeting by occupation also meets the requirement of representativeness. The group of
agricultural labourers not only displays the highest probability of being in poverty, it also
contains 37 per cent of the extreme poor. As such, the group constitutes about a fifth of the total
rural households.
Since no single indicator (however efficient) contains sufficient information, it is better to
combine the best among the lot
The preceding discussion shows that the poorest on the land scale reside in the functionally
landless category; the poorest on the housing scale are located in the Jhupri and one-room thatch
categories; and, the poorest on the occupation scale relate to the category of agricultural wage
labor. It seems, therefore, reasonable to combine information contained in land, housing and
occupation indicators (Tables 12 through 15). The idea is to find the common set that is present
in the poorest category on all three scales. This helps to identify the poorest of the poor.
Consider the combination of housing and occupation. This can be analyzed from various angles.
60 per cent of total agricultural wage labor households in the BIDS sample reside in the two
lowest housing categories (Table 12). The share of agricultural wage labourers among the
dwellers of various housing categories monotonically declines with housing status, as one
proceeds from Jhupri (55%), one-room thatch (43%), 1+ thatch (21%), to tin house (8%), and
tully/pucca house (2%) (Table 13). Clearly, the error of targeting can be further minimised by
combining housing and occupation. This is not only an issue of locating the extreme poor in
quantitative terms, but also one of identifying the most vulnerable. There are differences in
poverty level even within the agricultural wage labour. Thus, 75 per cent of agricultural labourers
living in the jhupri type correspond to extreme poor compared with 52-54 per cent observed for
the two thatch categories. Such gradations within wage labourers can only be captured by
applying at the same time housing and occupation-based indicators.
16
The same applies when information on landownership and housing is combined. As is known,
microcredit programs in Bangladesh follow mainly the criteria of landownership (defined as
owning up to 0.5 acre of land, otherwise termed as functionally landless}. It has been observed
that there is a considerable variation in poverty even within this land-size group--a feature
ignored by many of the microcredit programs. As a result, these programs may become restricted
to the richer sections among the poor.17 Data presented in Tables 14 and 15 illustrate that
possibility. The functionally landless households do not share the same degree of deprivation.
The poorest among them live at the bottom end of the housing scale: the lowest two housing
categories contain about 40 per cent of the functionally landless households and 52 per cent of
the extreme poor living within this land-size group.
Similar results can be derived when information on landownership and occupation is considered
together (Table 16). For the functionally landless households, variation in the incidence of
extreme poverty measured on the occupation scale is considerable. As before, the wage labor
households stand out as the most poverty-striken category. While there is little difference in the
extreme poverty rate between cultivator and wage labor households, those who could manage
to adopt trade and services are substantially better off (26-36 per cent vis-a-vis 54-58 per cent).18
, 17 Hossain (1988), for instance, found that only 14 per cent of Grameen households belonged to the
agricultural wage labor category, although the targeting criteria of 0.5 acre was strictly followed.
18 The marginal difference in the poverty rates between cultivators and wage labor within the functionally
landless category suggests very limited role that the tenancy market has for these households in moderating the
inequalitarian consequences of highly skewed land ownership structure.
17
Table 12: Distribution of agricultural labor households by type of housing
% of agricultural labourer households
Type of housing
Jhupri
5.0
1 room thatch
54.3
1 + room thatch
15.2
Tin house
24.7
Pucca/Tully house
0.8
Total
100.0
Table 13: Incidence of poverty among agricultural labor households by housing category
Housing categories
% of agricultural
labourer households in
each housing category
Incidence of poverty
among agricultural labourers
Extreme
Moderate
Jhupri
54.5
75.0
25.0
1 room thatch
42.7
54.0
35.0
1 + room thatch
21.4
51.4
43.2
Tin house
8.4
50.0
31.7
Pucca house
1.8
-
100.0
Tully house
2.6
-
-
Total
18.5
46.7
40.2
18
Table 14: Estimates of poverty by type of housing among rural landless
(<.50 acre of land) households
Incidence of poverty
% of poor households
Type of housing-
Extreme
Moderate
Extreme
Moderate
Jhupri
70.0
25.0
5.7
2.3
1 room thatch
48.0
34.0
46.1
37.6
1 + Room thatch
40.0
42.0
15.1
18.3
Tin house
29.0
29.0
31.0
36.2
Pucca huse
-
37.5
- ■
1.4
Tully house
25.0
45.0
2.0
4.2
Total
38.3
33.3
100.0
100.0
19
Table 15: Distribution of households by type of housing and landownership
(%)
Landownership (acre)
Housing
<.50
.50-1.49
1.50-2.49
2.50-4.59
5.00 +
Jhupri
3.0
0.3
-
-
-
1 room thatch
37.0
16.7
8.1
8.0
2.4
1 + room thatch
14.6
14.6
11.2
10.7
6.0
Tin house
41.0
63.7
72.0
65.3
72.3
Pucca house
1.2
1.4
6.8
12.7
17.0
Tully house
3.1
3.2
1.9
3.3
2.3
100.0
(639)
100.0
(281)
100.0
(161)
100.0
(150)
100.0
(83)
Total
Note:
Figures in parentheses are absolute number of households recorded in the sample.
20
Table 16 : Incidence of extreme poverty by occupation controlling
landholding size, 1989-90
(Per cent of population)
Landholding size (acres)
Occupation
Less than 0.50
0.5-2.49
2.5-4.99
5.00 and above
Cultivator
54.1
18.9
7.5
3.0
Wage labour
57.9
39.9
♦
♦
Traders
25.6
13.6
12.2
14.6
Service
35.8
20.5
17.1
16.4
Others
49.5
25.5
21.8
4.3
Source: Hossain (1995)
The summary information presented in tables 12 through 16 show that there would be
considerable targeting gains if one combines the poorest categories as per the three key
indicators. In short, the prospective poorest clientele would be agricultural labourers residing
in jhupri or single structure thatch with land owned up to 0.5 acre.'9
Locating the poorest in the poor regions
While we favour the set of three indicators--land, housing and occupation- this should not create
the impression that other characteristics such as region do not matter. Indeed, the emphasis
should be to prioritize the poorest areas first and then apply the household level core indicators.
Judged by the indicator of infrastructure alone, considerable differences in poverty rates are
noticeable (Table 17). For instance, the incidence of extreme poverty is 25 per cent in the
underdeveloped setting compared with 18 per cent in the developed setting. Other factors may
be taken into consideration in identifying the poorest regions.
19
This will, of course, not be true for urban areas (see, Tables 18 through 20).
21
Table 17: Estimates of poverty in rural area by infrastructure
Incidence of poverty
<)
Exireme
Moderate
With Road and electricity
17.5
26.6
With road and without electricity
24.2
26.9
Without road and without electricity
24.8
32.4
The 1991 Task Force Report on poverty alleviation attempted to take a closer look at this
question by actually identifying 100 "economically most depressed" upazilla (see, the distress
zone map). The task force considered factors, namely, (i) land area per person, (ii) proportion of
land under broadcast aus and deep water aman varieties of paddy20, as a measure of low
productivity due to depth of flooding and cropping pattern, (iii) proportion of irrigated area as
a measure of the capacity to adopt the modem agricultural technology, (iy) the proportion of
functionally landless households, and (v) the proportion of population engaged in non-farm
activity. Similar exercise has been undertaken by the World Food Programme (WFP) which is
using a distress zone map in implementing food-assisted programs throughout the country.
The upshot of the above is to point out that there would be further gains in fine tuning the
extreme poor oriented programs if one could combine household-based indicator targeting with
regional targeting both in design and implementation.
1
20
Aus and Aman are the two varieties of rice paddy grown in Bangladesh. The term "broadcast"
refers to the method of calculation while "deep water" refers to the level of water in the field where the
particular type of rice paddy is cultivated.
22
IV. Targeting the urban extreme poor
The issue of urban poverty is studied in lesser details, mainly due to lack of data. Nevertheless,
information presented in Tables 18 through 20 may provide some insights. First, th6’ incidence
of extreme poverty is generally much higher in slums and squatters than in other parts, which is
intuitive. The difference is stark: 45 per cent in slums as opposed to only 7 per cent in non-slum
areas. This suggests that area-based (regional/ cluster) targeting would be useful in reaching the
urban extreme poor. Second, cluster-based targeting may be supplemented by other
differentiation characteristics, based on household-based indicators. The validity of occupation
as indicator is upheld by the urban data as well. The manual day labourer category displays the
highest incidence of extreme poverty (32%) compared with 17 per cent for those engaged in petty
business and 9 per cent for the rentier class (Table 20). The incidence of extreme poverty is also
higher among families with younger household heads, and among less educated; but, these are
difficult indicators to administer. The same applies to the potential indicator of length of stay in
the city. The incidence of extreme poverty is highest for the newly settled migrants and, rather
strikingly, for the earliest migrants, However, it is difficult to objectively verify the length of stay
in the city which bars its application as extreme-poor identifying indicator.
23
V. Ill-health and extreme poverty: a close correlation?
Information presented in table 21 may be seen as a validation exercise for indicators which have
entered our final choice list. Identification of extreme poor become an important health policy
objective if it could be shown that it is the poorest who suffer most in terms of ill-health.
Admittedly, we are considering here only one of the many possible indicators, i.e., acute
morbidity observed over the past month. Nevertheless, the lessons may be instructive.
As the table shows, the morbidity rate is much higher among agricultural wage and construction
labourers on the occupation scale (17-18 per cent vis-a-vis 12-15 percent for cultivator and other
non-agricultural groups). The only exception is households located in fishing, livestock and rural
industry with significant presence of the gender dimension. It is also highest among the lowest
two categories on the housing scale. The morbidity rate is as high as 32 per cent for those living
in the jhupri category, followed by 16-17 per cent in the thatch category, in contrast to only 11-
15
per cent observed in case of tin and pucca categories. Similarly, the morbidity rate is highest
for the functionally landless (15 per cent vis-a-vis 11 per cent in the land-rich group). The latter
evidence is also corroborated by the Health and Demographic Survey (HDS) carried out by BBS
(see, BBS 1996).
24
VI. Process issues
How to avoid the risk of bureaucratic targeting
Implementation of core indicators is also an important process issue, having implications for
targeting. It is inadequate to only pin-point a set of core indicators for identifying the poorest.
Even the most effective set of indicators may have little effect on the status of the extreme poor
if the process of administering is left to the bureaucratic discretion of the programme managers.
This is particularly true in case of indicator targeting through means-testing as opposed to
indicator targeting via self-selection. The risks of leakage thus cannot be avoided in case of
bureaucratic targeting, as evidenced from the recent experience of Food-for-Education (BIDS
1997). Such risks can only be minimized through local consultation with community and NGOs,
a task that can be institutionally facilitated by the presence of effective local government.
Tying with other self-targeted programs: a second-best choice
While the option of minimizing risks of leakage and infiltration of the non-target group via
consultation with community, NGOs and local government functionaries need to be explored,
some intermediate solutions can still be thought of. This is important particularly in view of the
urgency of the problem under consideration.
As is known, the existing local government machinery is far short of the task of "managing
development" at the grass roots and, despite some recent attempts to reinvigorate the concerns'
for local government (Bill on Gram Sarkar or Village Government, for instance), the actual
devolution of power to lower tiers of government is restricted to the minimum. Indeed, if
anything, the official discourse on local government is disproportionately more biased towards
the electoral issues (such as whether members should be elected via direct vote or selected by the
upper tier, or for that matter, what should be the gender composition of these members, etc) and
much less with the task of working out the taxing, spending and jurisdictional power of the local
bodies.21
In the above backdrop it is unlikely that local government will soon become an efficient organ
of power coordinating/ managing development at the grass roots. At least, this is going to be the
likely scenario in the short to medium term. In the absence of such effective overseeing
machinery in place it is difficult to see how the risks of bureaucratic targeting and leakage can
21 This is comparable to a situation that an observer of local government dynamics in Bangladesh aptly
characterized as "too much of democracy, too little of power".
25
be avoided (even if we arrive at a consensus on the targeting indicators along the line suggested
in the present paper). The question that springs up is : is there any alternative?
One way out is to locate potential health beneficiaries from the extreme poor group in the
programs which are in any case self-targeted to the need of the poorest. A number of evaluations
have proven the case beyond doubt that programs such as Food-for-Works (FFW) and
Vulnerable Group Development (VGD) are targeted towards the poorest.22 This can be verified
by comparing the relative weight of the extreme poor households in these programs with the
general weight of the extreme poor in the overall rural distribution. Thus, the bottom three
expenditure groups account for 22 per cent of rural households (roughly corresponding to the
group of the extreme poor). These groups display an overwhelming presence in FFW and VGD
programs: 72 and 92 per cent, respectively (Sen 1997).
Note that the average expenditure in each of the expenditure groups in FFW and VGD
distribution is lower than the corresponding figure in the overall rural distribution. This implies
that, even within the same expenditure interval, these programs targets the less well-off. Between
the two programs, the VGD beneficiaries stand out to be the most disadvantaged in terms of
poverty ranking. A major reason for targeting success may lie in the nature of self-targeting
(associated with characteristics such as inferior quality wheat, hard manual labor, social stigma,
and gender criteria such as being "abandoned" female headed households) that often characterize
these programs.23
What is the extent of coverage of the extreme poor by these programs? While hard data are yet
to be compiled, it appears that some 5-10 per cent of rural households have already been brought
under their ambit. Another important facet of these programs is their country-wide coverage and
a system of monitoring which, although not without deficiencies, is able to provide important
buffer to the extreme poor in times of severe economic stress.24 The above-mentioned proportion
of rural households translates into a substantial number of poor households, and may represent
a convenient entry point into the arena of pro-poor health intervention in rural areas. All it
requires is a mechanism of information exchange between FFW/VGD and health workers,
though exact institutional modalities need to be worked out further.
22
For a recent review, see Sen (1997).
23 It is a cause for concern that allocations for these programs (FFW in particular) have been declining in
absolute terms in recent times- from 716 to 640 thousand tons over 1992-96. Such negative developments will
have adverse implications for the extreme poor.
24 These programs still appear to have important shortcomings, being not able to cater the extreme poor
during the time of the most acute need in a year, and in the most backward of places (see, Sen 1997).
26
VII. Conclusion
The paper premises on the emerging evidence that the poor are not homogeneous and a sharp
division exists among the poor, by age, sex, ethnicity, region, occupation, food, shelter,
clothing, land, education, health, networking capacity, even freedom. It argues that the poorest
warrant specific analytical and policy focus. Policies that benefit the non-poor and moderate poor
may not necessarily favour the extreme poor. The gap between the poor and the poorest need to
be minimized in order to facilitate broad-based human development. Note that it is this concern
which underlies the recent UNDP effort to bring to the fore the case of human poverty as distinct
from the concern for human development and broad-based growth.25The task of identifying
(targeting) the extreme poor is, however, far from being straightforward. It is even more difficult
to design an implementable program which will naturally cater to the health heeds of the poorest.
The present paper attempts to address the targeting question.
Targeting is usually done under imperfect/ incomplete information since generation of full
information (such as via prior income/ expenditure surveys) is prohibitively costly. The paper,
therefore, attempts to devise extreme-poor sensitive indicators by emphasizing on broad group
characteristics rather than individual targeting. Another important principle is that the indicators)
for targeting should be not only effective in minimizing leakage to non-poor (or richer among the
poor, for instance), but also in ensuring broad coverage of the target group (in our case, reaching
the poorest with health care). The first aspect, which focusses on the targeting ability (how
sensitive is the given indicator in identifying the target group?), may be viewed as the necessary
condition in order to be selected as a targeting indicator. The second aspect, which focuses on ■
the representativeness issue (how effective is the indicator to reach the maximum numbers of the
target group?), may be termed as the sufficient condition. Certain indicators may be good from
the first point of view but fail to meet the second criteria, being too restrictive.
A particular result derived in the paper relates to the intuitive observation that since no single
indicator (however efficient) contains sufficient information, it is better to combine the best
among the lot. The paper experimented with a number of potential indicators ranging from
clothing, access to safe drinking and sanitation, to literacy, and land tenure, but found them
wanting in meeting either the necessary or the sufficient condition for targeting. Three indicators
stood out prominently in the battery of tests that were done; they are: land, housing and
occupation. All of them met the above two conditions of targeting. However, considered
individually, they still allow some leakage which can be avoided if these criteria can be
combined to identify the poorest of the poor. Packaging of indicators is important both from the
vantage point of equity and from the consideration of given resource constraints. Following this
approach, the paper goes on to identify the poorest of the poor in rural Bangladesh which are
25
For an introduction to the theme, see Anand and Sen (1997).
27
likely to be agricultural labourers residing in jhupri or single structure thatch with land owned
up to 0.5 acre. Indicators thus derived were validated by looking at the variation of morbidity
rates by land, housing, and occupation. These indicators also meet the criteria of visibility: they
are easy-to-capture.
While the household characteristics-based targeting favours the set of three indicators-land, ■
housing and occupation- this should not create the impression that other characteristics such as
region and ethnicity do not matter. Indeed, the emphasis should be to prioritize the poorest areas
(and ethnicities) first and then apply the household level core indicators.
The paper, then, argues that even the most effective set of indicators may have little effect on the
status of the extreme poor if the process of administering is left to the bureaucratic discretion of
the programme managers. This is particularly true in case of indicator targeting through means
testing as opposed to indicator targeting via self-selection. The risks of leakage thus cannot be
avoided in case of bureaucratic targeting. Such risks can only be minimized through local
consultation with the community and NGOs, a task that can be institutionally facilitated by the
presence of an effective local government.
However, the existing local government machinery is far short of the task of "managing
development" at the grass roots and, despite some recent attempts to reinvigorate the concerns
for local government (Bill on Gram Sarkar or Village Government, for instance), the actual
devolution of power to lower tiers of government has been restricted to the minimum. Indeed,
if anything, the official discourse on local government is disproportionately more biased towards
the electoral issues and much less with the task of working out the taxing, spending and
jurisdictional power of the local bodies. Given the relative absence of effective local government,
the paper advocates for an "intermediate" solution, at least in the short to medium term.
The idea here is to locate potential health beneficiaries from the extreme poor group in the
programs which are in any case self-targeted to the need of the poorest. A number of evaluations
have proven the case beyond doubt that programs such as Food-for-Works (FFW) and
Vulnerable Group Development (VGD) target to the poorest. Some 5-10 per cent of rural
households have already been brought under their ambit. Another important facet of these
programs is their country-wide coverage and a system of monitoring providing important buffer
to the extreme poor in times of severe economic stress. As proportion of extreme poor, the
overall coverage translates into a substantial number, and may represent a convenient entry point
into the arena of pro-poor health intervention in rural areas. All it requires is a mechanism of
information exchange between FFW/VGD and health workers. Of course, this is easier said than
done, but arguably it is easier to implement compared to a scheme of complex inter-ministry
coordinations involved in first identifying the poorest and, then, cater to their health care needs.
28
Table 18:
Estimates of poverty in urban area for selected socio-economic groups
Socio-economic groups
fi
Percent of
households
in the
category
Head count ratio
(Per cent of population)
Income gap
ratio
(Per cent)
Foster et
al. measure
(Per cent)
Moderate &
Hardcore
Hardcore
33.3
66.7
80.4
26.5
45.4
7.3
29.1
20.0
8.52
1.35
95.2
4.8
41.8
40.5
18.3
12.0
25.8
22.7
3.78
2.91
19.2
39.7
26.2
15.0
56.9
37.7
36.7
45.7
35.1
14.1
15.3
16.7
29.2
23.6
25.2
25.4
5.78
2.74
3.45
4.28
Nuclear
Extended
Joint
62.7
31.5
5.8
43.7
36.8
49.0
17.6
17.8
21.3
25.3
26.1
26.6
3.66
3.66
5.05
Length of stay in the
city:
Less than 10
10-19
20-29
30 & over
11.8
28.3
23.0
36.8
56.6
36.2
35.1
42.2
24.7
15.9
14.1
20.0
24.2
23.4
26.0
28.0
4.54
5.20
3.69
3.93
Resident of the
household:
Slums & squatters
Others
Gender (Household
head):
Male
Female
Age of the head of the
household:
Less than 30
31-40
41-54
55 & over
Family type:
Source:
Hossain and Afsar (1996).
29
Table 19:
Estimates of poverty in urban area by the level of education of the household
head and the spouse
Level of education
Percent of
households
in the
category
Head count ratio
(Per cent of population)
Moderate &
hardcore
Hardcore
Income gap
ratio
(Per cent)
Foster et
al. measure
(Per cent)
Household head
education:
No formal education
20.5
79.2
43.3
27.9
8.00
Up to primary
7.0
65.9
43.5
32.1
7.13
Up to secondary
25.7
50.9
19.2
24.2
4.04
College
20.7
25.2
5.9
24.6
2.17
University
26.2
15.5
3.7
14.1
0.43
No formal schooling
39.0
66.2
31.7
27.2
6.53
Up to primary
7.3
71.4
38.4
28.7
6.96
Up to secondary
29.0
27.2
8.1
21.5
1.82
College
16.7
13.8
4.5
22.7
0.81
University
8.0
17.4
2.4
9.4
0.24
Spouse's education:
Source:
Hossain and Afsar (1996).
30
’
Table 20:
Estimates of poverty in urban area by occupation of the household head
Present occupation
Percent of
households
in the group
Head count ratio
(Per cent of population)
Moderate &
Hardcore
Hardcore
Income gap
ratio
(Per cent)
Foster et
al. measure
(Per cent)
Labourer
17.2
65.4
32.1
30.4
7.40
Employee
28.0
62.0
21.6
22.1
2.84
Officer or manager
12.2
13.1
0.0
10.3
0.19
Business
30.8
36.5
16.8
26.9
3.67
Rentier
5.3
36.6
9.3
22.3
2.79
Unemployed
6.5
45.6
17.1
26.9
5.74
Agricultural labor
13.7
72.6
39.3
26.3
6.06
Cultivator
2.5
70.1
39.1
27.3
6.04
Non-farm worker
17.0
32.7
6.6
21.3
2.43
Unemployed
11.7
61.7
22.6
26.7
6.57
Student
25.7
20.2
5.6
21.7
1.42
Dependent
29.5
43.2
23.4
27.7
4.11
Occupation before
migration:
Source:
Hossain and Afsar (1996).
31
Table 21 :
Morbidity rate by extreme poor identifying indicators (landownership,
housing and occupation)
Extreme poor identifying indicators
0
Morbidity rate
(Per 1000 population)
Household heads, occupation
Cultivator
12.3
Agricultural labour
18.3
Fisheries/Livestock/Cottage industry
24.3
Trade
12.6
Transport
13.6
Construction
17.3
Self service
15.5
Salaried service
12.1
Non-agr. wage
12.7
Others
11.1
Jhupri
■ 31.6
1 Room hut
16.9
1+Room hut
15.7
Tin house
11.1
Pucca house
15.4
Tully house
14.9
Housing
Land (acre)
<.50
15.3
.51-1.49
13.0
1.50-2.49
12.1
2.50 - 4.99
10.5
5.00 +
11.0
Source: Estimated from Primary APT Data of BIDS
32
Annex Tables
Table 1:
Movement in and out of the poverty, 1987-90
Poverty level
(1987-88)
Total
Poverty level (1989-90)
Hard-core
poor
Moderately
poor
Non-poor
124
(41.9)
84
(28.4)
88
(29.7)
296
(24.3)
Moderately poor
140
(32.8)
130
(30.4)
157
(26.8)
427
(35.0)
Non-poor
79
(15.9)
119
(23.9)
299
(60.2)
497
(40.7)
Total
343
(28.1)
333
(27.3)
544
(44.6)
1220
(100.0)
'Hard core1 poor
Sen (1995). Original- Estimated from Analysis of Poverty Trends (APT) Project
Data of BIDS.
Source:
Note:
1.
2.
Income measures of poverty have been used for capturing movement in and out
of poverty since expenditure module was not executed during the 1987-88 survey.
Figures in parentheses indicate row percentages except for the last column where
they show column percentages.
33
'
Table 2:
Estimation of poverty by types of housing among marginal landowners
(0.50-1.49 acres)
Incidence of poverty
% of poor households
Type of housing
Extreme.
Moderate
Extreme
Moderate
Jhupri
-
100.0
-
1.0
1 Room thatch
38.3
36.2
27.7
19.1
1 + Room thatch
34.1
29.3
21.5
13.5
Tin house
17.3
30.7
47.8
61.8
Pucca house
25.0
25.0
1.5
1.1
Tully house
11.1
33.3
1.5
3.4
Total
23.1
31.7
100.0
100.0
Table 3:
Estimates of poverty by types of housing among small landowners (1.50-2.49
acres)
% of poor households
Incidence of poverty
Type of housing
Extreme
Moderate
Extreme
Moderate
Jhupri
-
-
-
-
1 Room thatch
23.1
23.1
13.0
8.1
1 + Room thatch
33.3
33.3
26.1
16.2
Tin house
11.2
24.1
56.5
75.7
Pucca/Tully house
9.1
-
4.3
-
Total
14.3
23.0
100.0
100.0
34
Table 4:
Incidence of poverty and % of poor households by types of housing among
medium landowners (2.50-4.99 acres)
Incidence of poverty
% of poor households
Type of housing
Extreme
Moderate
Extreme
Moderate
Jhupri
-
-
-
-
1 Room thatch
9.1
27.3
12.5
11.5
1 + Room thatch
6.3
31.3
12.5
19.2
Tin house
4.1
17.3
50.0
65.4
Pucca house
5.3
-
12.5
-
Tully house
20.0
20.0
12.5
3.8
Total
5.3
17.3
100.0
100.0
Table 5:
Incidence of poverty and % of poor households by types of housing among
large landowners (5.00 + acres)
% of poor households
Incidence of poverty
Type of housing
Extreme
Moderate
Extreme
Moderate
Jhupri
-
-
-
-
1 Room thatch
50.0
50.0
25.0
14.3
1 + Room thatch
20.0
-
25.0
-
Tin house
3.3
8.3
50.0
71.4
7.1
-
14.3
Pucca house
Tully house
-
-
-
-
Total
4.8
8.4
100.0
100.0
35
REFERENCES
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multidimensional perspective, Background paper for Human Development Report 1997, 1996
(Mimeo).
Bangladesh Bureau of Statistics (BBS), Divisionwise health and social statistics of rural
Bangladesh by land ownership 1994, Dhaka, 1996.
Bangladesh Institute of Development Studies (BIDS), Enhancing accessibility to and retention
in primary education for the rural poor in Bangladesh, BIDS, Dhaka, 1997 (Mimeo).
Baulch, Bob, "Neglected Trade-Offs in Poverty Measurement", IDS Bulletin, Vol. 27, No. 1,
1996, pp. 36-42.
Begum, Sharifa, "Health Dimensions of Poverty" in: Rahman, Hossain Zillur, Mahabub Hossain,
and Binayak Sen (ed.), 1987-94: Dynamics ofrural poverty in Bangladesh, Bangladesh Institute
of Development Studies (BIDS), Dhaka, April 1996 (Mimeo).
Besley, Timothy, and S. M. R. Kanbur, "The Principles of Targeting" in M. Lipton and J. van
der Gaag (eds.), Including the poor: proceeding ofa symposium organized by the World Bank
and International Food Policy Research Institute, Washington, D.C., 1993.
Cornia, G. A. and F. Stewart, "Two errors of targeting" in D. van de Walle and K. Nead (eds.),
Public spending and the poor: theory and evidence, Baltimore, Johns Hopkins Press, 1994.
Govt of Bangladesh (GoB), "Task Force Report on Poverty Alleviation". In: Report of the Task
Forces on Bangladesh development strategiesfor the 1990s, Vol. 1, University Press Ltd, Dhaka,
1991.
Hossain, Mahabub, "Rural Income and Poverty Trends" in: Rahman, Hossain Zillur, Mahabub
Hossain, and Binayak Sen (ed.), 1987-94: Dynamics ofrural poverty in Bangladesh, Bangladesh
Institute of Development Studies (BIDS), Dhaka, April 1996 (Mimeo).
Hossain, Mahabub, "Socioeconomic Characteristics of the Poor" in: Rahman, Hossain Zillur, and
Mahabub Hossain (ed.), Rethinking rural poverty. Bangladesh as a case study, Sage
Publications, New Delhi, 1995.
Hossain, Mahabub, Nature and Impact of the Grameen Bank in Bangladesh, IFPRI Research
Report, 1988.
Hossain, Mahabub, Credit for the rural poor: The Grameen Bank in Bangladesh, Research
Monograph No. 4, BIDS, Dhaka, 1984.
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Hossain, Mahabub and Rita Afsar, Urban poverty tables, 1996 (Mimeo).
Jack, J, C., The Economic life ofa Bengal district, 1916 (Reprint: Oxford University Press, 1975,
with an Introduction by Shahid Amin).
Lipton, Michael, Defining and measuring poverty: conceptual issues, Background paper for
Human Development Report 1997, 1996 (Mimeo).
Procacci, Giovanna, "Social economy and the Government of poverty" in Graham Burchell,
Colin Gordon and Peter Miller (eds), The Foucault effect. Studies in governmentality, University
of Chicago Press, 1991, pp. 151-168.
Rahman, Hossain Zillur, "Crisis and Insecurity: The Other Face of Poverty", in; Hossain Zillur
Rahman and Mahabub Hossain (eds.), Rethinking rural poverty. Bangladesh as a case study,
Sage Publications, New Delhi, 1995, pp. 113-131.
Rahman, Hossain Zillur, "Crisis, Income Erosion and Coping" in: Rahman, Hossain Zillur,
Mahabub Hossain, and Binayak Sen (ed.), 1987-94: Dynamics ofrural poverty in Bangladesh,
Bangladesh Institute of Development Studies (BIDS), Dhaka, April 1996 (Mimeo).
Ravallion, Martin, Can high-inequality developing countries escape absolute poverty?, Policy
Research Department, World Bank, 1996 (forthcoming in Economic Letters).
Ravallion, Martin and Binayak Sen, "When method matters: monitoring poverty in Bangladesh"
in Economic Development and Cultural Change, Vol. 44, No. 4, July 1996.
Ravallion, Martin and Q. Wodon, What are a poorfarmer's prospects in rural non-farm sector?,
Policy Research Department, World Bank, 1997 (Mimeo).
Sen, Binayak, "Movement In and Out of Poverty: A Tentative Explanation" in: Rahman, Hossain
Zillur, Mahabub Hossain, and Binayak Sen (ed.), 1987-94: Dynamics of rural poverty in
Bangladesh, Bangladesh Institute of Development Studies (BIDS), Dhaka, April 1996 (Mimeo).
Sen, Binayak,"Poverty and Policy" in Rehman Sobhan (Ed.), Growth or stagnation? A review
ofBangladesh's development 1996, Centre for Policy Dialogue and University Press Ltd, Dhaka,
February 1997, pp. 115-160.
World Food Programme (WFP), Poverty mapping, Dhaka, 1996.
Yokota, Hiroshi, K. Tanabe, Y. Akiyoshi and others, Arsenic pollution ofgroundwater in Samta
Village, Jessore, Bangladesh, 1996 (Mimeo).
38
N* 25:
Methods d'analyse de I'alde extdrieure <i la santd : I'exemple du Tchad - Document pays WHO/1CO/MESD.25
N* 26:
Health and poverty in the context of country development strategy: a case study on Bangladesh - Country
document - WHO/ICO/MESD.26
Conn H . 3-0. 1_( 3
Innovating Approaches to Delivering Essential Package of Health
and Family Planning Services at the Outreach/Community Level:
Experiences, Lessons, and Recommendation
Henry B. Perry
• A Paper Circulated in Connection with the International Workshop on “Meeting the Health Needs
of the Poorest and the Most Vulnerable" Organised by BIDS and WHO
11-13 April, 1999,
Dhaka, Bangladesh
Innovating Approaches to Delivering Essential Package of Health and Family
Planning Services at the Outreach/Community Level:
Experiences, Lessons, and Recommendation*
Henry B. Perry
Bangladesh is entering a new era in the provision of health and family planning services. During the
past two decade's both government and private providers made enormous strides in responding to
the desire of couples to reduce their fertility and to inaprove the survival of their children. During this
period the government of Bangladesh and the donor community gave priority to the family planning
services. This focussed attempt has been highly successful in slowing down the population growth
and Bangladesh is now cited as a success story for this. The current fertility rate of Bangladesh is
3.3
and the population growth rate about 1.6 per cent.
However, in Bangladesh, fewer than 40 per cent of the population has access to basic health care,
only 25 per cent of the pregnant women receive prenatal care, 10 per cent of the births are attended
by a trained attendant and more than 95 per cent deliveries takes place at home in unhygienic
condition without the medical supervision. In short, health has remained so far a neglected area at
least in relation to family planning.
Welfare (MOHFW) as well as
To correct this imbalance the Ministry of Health and Family
the external donor agencies resorted to a policy to pay greater
attention to the health service provision in which support for other elements of the essential services
package beyond family planning will receive higher importance and support. The new Health and
Population Sector Strategy (HPSS) of the government of Bangladesh calls for the provision of an
essential services package to the entire population at four different levels of service delivery: (1)
outreach /community, (2) Health and Family Welfare Centres, Rural dispensaries, (3) Thana Health
Complex (first referral source) and (4) District Hospitals (second referral source). Following is the list
of activities which are specified in the HPSS for the outreach/community level1:
' This represents the summary version of a larger paper done by the author. The summary version has been done by Sharifa
Begum.
’ See the actual document for a complete listing of the services to be offered at all four levels of service delivery (MOHFW; 1993;
Health and Population Sector Strategy; Dhaka, Government of Bangladesh.
1.
2.
Child health
1.1
EPI
1.2
ARI
1.3
Diarrhoeal disease prevention & control
1.4
Measles control and prevention
1.5
Malaria prevention and control
1.6
Correct and integrated management of the sick child
1.7
Malnutrition
1.8
Vitamin and deficiency
1.9
Iodine deficiency
Reproductive Health
2.1
3.
Maternal Health
2.1.1
Antenatal care
2.1.2
Delivery care
2.1.3
Postnatal care
2.1.4
Menstrual regulation & post-abortion complication care
2.2
Adolecent health
2.3
Family Planning
2.4
Management and prevention/control of RTIs/STIs and HIV/AIDS
Communicable disease control
3.1
TB
3,2
Leprosy
3.3
Malaria
3.4
Kala-azar
3.5
Filaria
3.6
Intestinal parasite disease control
2
4.
Limited curative care
As part of the preparation for the fifth Health and Population Programme (HAPP 5) which would
continue for five years from mid-1998 the need has arisen to find some innovative service delivery
strategies for providing various elements of the new essential services package proposed in the
health and population sector strategy at outreach/community level particularly at a cost which is
sustainable by the government and local population with minimal external financial support.
The experience of Bangladesh in this regard however is quite rich for its most dynamic and innovative
NGO sector. It experience with the operations research concerning health and family planning
services also is the most extensive one in the world. But much of this experience is poorly
documental or, if documented is not widely available or known. Particularly the cost of many of the
approaches is unavailable, and there is little independent assessment of the effectiveness and cost of
many of the approaches.
Yet, the available knowledge from the major innovative approaches
revealed that BRAC (Bangladesh Rural Advancement committee) has the most extensive (both in
terms of numbers of persons reached with services as well as in terms of breadth of services,
provided) and the most promising experience with community and governmental collaboration in the
provision of the essential services package at the outreach/community levels.
BRAC’s Community based Health and population programme which utilizes community health
workers and makes use of community partnerships through the formation of 'Gram Committees has
major implications for extending all elements of essential services package to every household in a
systematic and sustainable way integrating all elements of essential services package at the
community level. Its features include expanded scope of services at peripheral static service delivery
sites as an alternative to doorstep services, strengthened local primary health care centres, and
provision of a comprehensive package of basic MCH-FP services at the community level. But its
most significant feature its strong involvement with the community.
The indigenous community health workers of the BRAC called "Shastho Shebikas’ are selected by it
in collaboration with the community and with local MOHFW staff.
These workers are generally
illiterate, middle-aged women, trained by BRAC in a 12-week course and then supervised by BRAC
field staff as well as by a local village committee. They provide a broad range of services at the time
of monthly home visits to their clients which includes most of the elements of the essential services
3
package, such as, EPI, ORT distribution, DOT for tuberculosis patients, family planning services,
post-natal, pre-natal care etc.
Shastho shebikas are provided no salary by the BRAC or by the community but they do receive an
income from the sale of drugs and supplies.
The international Centre for Diarrhoeal Disease Reseach, Bangladesh (ICDDR'B) has extensive
experience with operations research and with the implementations of innovative approaches. The
ICDDR'B/Matlab MCH-FP project is the longest and most thoroughly documented experience in
Bangladesh with the provision of most of the elements of the essential services package at the
outreach/community level. It also has valuable recent experience in the development of reproductive
health programmes (including the promotion of safe motherhood and the detection and treatment of
reproductive tract inflections) for past tow decades. This project has been providing a comprehensive
package of services at the household level to 100,000 persons through bi-weekly home visits from
community health workers.
Services at a nearby subcentres are readily available with an effective
hospital referral system being in place. The cost of the services provided by the package was US $
3.50 in 1989; since then, the cost has not increasd in any notable way beyond inflation.
The CARE TICA (Training Immunizers in Community Approach) project is an important example of a
successful innovative approach to strengthening MOHFW services at the outreach/community level
without the usual incentives and costs associated with pilot project (such as salary supplement,
involvement of expatriates, technical and administrative staff, etc.) Through this project it has been
possible to improve the effectiveness and productivity of the MOHFW EPI programme staff by
focussing first on strengthening supervision, then on providing staff training and improving the
monitoring of field activities, and finally on mobilizing the community for greater participation in EPI
activities.
The Govemment-NGO collaboration also exists for leprosy and tuberculosis control.
Under these
collaborative arrangements MOHFW provides drugs, supplies, and facilities and the NGOs provide
technically competent staff and training. There is considerable evidence that programme services
have improved under this collaborative arrangement, Leprosy programme now working in 195 thanas
and tuberculosis control programmes in 309 thanas.
4
There are other collaborative arrangements of MOHFW with UNICEF, ICDDR’B, GTZ, the Johns
Hopkins University Centre for Communication Programme, World Vision, Save the Children USA,
Plan International, World Relief, Local Initiative Projects, and others for expanding the scope of
services at peripheral static service delivery site through alternative approaches to deliver services at
the doorstep including strengthening the involvement of local community members in the provision of
services and/or planning, supervision, and evaluation of services, both in rural and urban areas,
As regards local primary health care centres major frontline organizations in working innovative
efforts to deliver services through health centre are BRAG, Grameen Bank, Gonoshasthya Kendra,
the Radda, Dhaka community Hospital.
BRAC health centres serve members of BRAC's community voluntary organizations (VOs) and other
community members as well who receive services from the centre at a slightly higher fee. These
facilities provide a broad range of services and staff at each centre usually consists of a physician, a
paramedic, a midwife, a pharmacist, and a laboratory technician. Utilization data of these centres are
not available, but anecdotal reports suggest utilization rate may be low at many centres.
The Grameen health centres are operated by physicians and their sub-centres by paramedics. The
centres focus are the care on patients with acute illnesses, and referral arrangements exist with three
non-profit private hospitals in and around Dhaka city. A prepayment health insurance scheme has
been developed which account for one-third of the cost of the centre operations. Locally generated
income accounts for 66 per cent of total costs, The annual per capita recurrent costs are only US $
0.37.
Gonoshasthya Kendra operates through four sub-centres. These are staffed mainly by paramedics,
but a physician visits each sub-centre twice a week.
These facilities are closely related to the
Gonoshasthya Kendra Hospital which manages referrals from sub-centres. The paramedics of the
sub-centres also carry out home visits to provide basic health care and health education.
Radda provides comprehensive MCH-FP services at six sites in an area of Dhaka city with effective
referral linkage developed with the government hospitals for those clients requiring emergency
obstetric care or other emergency hospital services. It currently recovers only 15 per cent of costs
from clients.
5
Dhaka community Hospital operates a rural primary health care clinic and maintains a 23 bed facility
in Dhaka. The programme is unique in the sense that it is completely self-sustaining and receives no
outside financial support. In the rural clinic 800 families contribute Tk. 10 monthly to the programme
and receive periodic home visits from health workers as well as free consultations from a physician at
the clinic. Drugs are not free. Hospital services in Dhaka are provided on a deferred payment basis
when necessary, but recovery rates are quite high.
As part of strengthening the reproductive care provided by the local practitioners, both government
and NGOs have programmes to train the traditional birth attendants and train women with 8 to 10
years of education for midwifery skill.
Under the safe motherhood Initiatives there is an UNFPA funded Reproductive Health, Family
Planning and Emergency Obstetric Care project under which Maternal and Child Welfare Centres
offer full range of reproductive health, family planning and emergency obstetric care services,
including caesarean section. A major part of the project activity is the training of MOHFW physicians
and paramedics in the surgical, anaesthetic,
and nursing skills required to provide emergency
obstetric care. There is a UNICEF funded safe motherhood project too ICDDR’ B and BRAC too
have such projects.
The initiatives noted above though are the major ones represent only a small portion of various
activities going on in Bangladesh with regard to the delivery of the essential services package at
outreach/community levels. There is little independent assessment of the effectiveness and cost of
many of these approaches. Thus, for implementing HAPP-5 basing on local experiences these
approaches need analysis and evaluation including assessment from clients, providers, and
supervisors about the strength and weakness of them. Before doing that may not be advisable to
undertake any further pilot projects for HAPP-5 than to extract lessons from the already existing
approaches. 'Model' thanas may be developed based on existing experiences where new policies
and procedures can be implemented and closely monitored.
A national task force comprising of professionals, local health workers, community members with
experience in local service delivery and community involvement may be convened to review the
existing experience and to make recommendations as to how the essential services package can
best be applied on a national basis at the outreach/community level. The task force may also identify
6
priority areas for further pilot projects and operations research issues
For operations research to
have maximal utility the focus should be on issues which are likely to become relevant in 5-10 years
and not an issue which need answers today or in the near further.
This is because operations
research project generally take one year to develop, at least several years to implement, and one or
more years to write-up and disseminate the results.
Although there are a good number of innovative approaches made by the NGOs and MOHFW to
deliver the health care services at outreach/community level there has been notable lack of
experience with regard to strengthening the contribution of local private practitioners to the provision
of various elements of the Essential services package. Currently they are the major providers of
services (88% of the total) and will continue to do so in the future. Thus they are as the first source of
care for acute illness. The current role of these practitioners at local level and the quality of care that
they provide need reviews so that policies and activities can be undertaken which would encourage
them to improve quality of their services rendered, teach clients healthy behaviour, and promote
referral of the clients with life threatening conditions to more specialized and appropriate treatment
centres.
It is observed from various approaches made so far, the combining of MCH and family planning
services, forming partnerships among MOHFW staff, NGO staff, and community members, and
strengthening periopheral fixed sites of services delivery while maintaining periodic contact at the
same time with every family member in the community represent the most promising approach for
delivery of the essential services package at the outreach/community level. The BRAC's experience
with ‘Shastho Shebikas’ ICDDR'B's experience with Indigenous Community Health Worker and
similar other experiences also bear some testimony to the fact that local level minimally paid
community health workers can provide many of the elements of the essential services package at the
outreach/community level if training,
supervision, and support are adequate.
These worker can
provide a broader range of services than FWAs and HAs are currently providing. Hence they are able
to serve as the resource for expanding the coverage of a broader set of services in the rapidly
growing national population without expanding the number of salaried FWAs and HAs.
These
community-based workers in addition to actually providing services may be entrusted with the
responsibility of motivating people to make better use of underutilized government health resources
and also to strengthen their role as partners in health worker and family planning activities at the local
level. In this regard, the training supervision, and support that will be needed in order for HAs, FWAs
7
and the indigenous community health works to functions together to provide the Essential service
package at outreach/community level need emphasis and proper specification.
However, unless some systematic changes are made in the MOHFW service delivery system which
will promote increased accountability to the community and supervisors, improved quality of services,
increased productivity and improved motivation of staff, improved client relations and responsiveness
to client needs, decentralization community and NGO involvement, and local monitoring based on
accurate information, the changes which may be made to improve the provision of the essential
services package at the outreach/community level will be short-lived.
Systematic improvements
affecting all levels of MOHFW operations will be required for appreciable improvements in service
delivery at the outreach/community level. High-level political support alongwith strong managerial
and technical support will be needed to promote the changes in the MOHFW which will lead to
heeded systematic improvements. Mechanism will need to be developed to communicate to political
officials the need for such improvements and the significance of such improvements for the health
and well-being of the population. Systematic changes in the MOHFW operation should be seen as
equal in importance to technical and financial support for improving service delivery at the
outreach/community level.
Finally, as large-scale rural-to-urban migration will continue in Bangladesh during the next several
decades experiences and successful approaches in urban areas will have relevance to an
increasingly larger segment of the national population. Hence, experiences and approaches from
urban service delivery relevant to essential services package at the outreach/community should be
incorporated into the planning of HAPP-5.
8
Corvy h
Turning the Tables on Poverty and Ill Health
'Tn the fight against poverty, we need to approach
rich and poor countries alike", stressed Dr
Brundtland, who added "From being an unproductive
consumer of public budgets, health is now gradually
seen as a central element ofproductivity itself'.
Our lack of interest in health as an economic concept
is due to complacency, she suggested. This is
"promoted by powerful interests in health care
technology, including within the health professions
themselves....Health systems have become dumping
ground for the consequences of inadequate policy".
Dr Brundtland emphasised the need for improved
policies on health which must encompass economics,
politics, the environment and social issues.
WHO’s Director-General recently spoke at a seminar
on Public Health for a New Era at the King’s Fund in
London on 14 January.
In her speech to the
assembled planners, economists and public health
specialists, Dr Brundtland said:
"There is solid evidence to prove that investing wisely
in health will help the world take a giant leap out of
poverty. We can drastically reduce the global burden
of disease. If we manage, hundred of millions of
people will be better able to fulfil their potential,
enjoy their legitimate human rights and be driving
forces in development. People would benefit. The
economy would benefit. The environment would
benefit. It is a complex process - but it can be done."
Dr Brundtland added that, although the world has
long known that poverty breeds ill health, it was now
clear that ill health also perpetuates poverty:
"Turning that around we end up with a simple, but
vastly significant assertion: improved health is a key
factor for human development and again, for the
development of nations and for their economic
growth", she said. It is well-known that the poor are
the most exposed to the risks of a hazardous
environment, and the least informed about threats to
health. It is the poor who bear the brunt of crude
structural adjustment policies and unregulated
globalization, of epidemics of HIV/AIDS, malaria
and tuberculosis.
The seminar was also addressed by Amartya Sen,
winner of the 1998 Nobel Prize for Economics, Clare
Short, UK Secretary of State for International
Development, Tessa Jowell, UK Minister of State for
Public health and Str Donald Acheson, author of the
UK’s Independent Inquiry into Inequalities in Health.
A list of all Dr Brundtland's speeches is available on
the Internet by accessing the following address:
http://www.who.int/inf-dg/index.html#speeches
CONTENTS
"Turning the Tables on Poverty and Hl Health"
Mrs Brundtland speaks out
1
Editorial
2
Network Contact Address
2
The Social Summit - where are we?
2
NGO Participation in Copenhagen+5
3
Useful Contacts : NGLS
3
Summary of Kisumu meeting report
4
Name the Network
5
HSD News
6
Wellcome Trust
6
IPHNnews - March 1999 - page 1
EDITORIAL
The Social Summit - where are we?
Bringing health to the core of development - the
commitment made by Dr. Brundtland is close to the
concerns of a small advisory group which met
recently in Kenya to explore how the Network could
highlight the role of health in poverty reduction and
in sustainable human development. Ideas on this and
on other issues related to poverty and health that were
shared at the meeting are presented in this issue of
our newsletter.
The World Summit for Social Development, which
took place in Copenhagen in 1995, was an important
effort to focus world attention on social issues,
particularly eradicating world poverty. It took place
at a time when global and national politics were
dominated by market liberalization and reducing the
role of the state. Now, almost 5 years on, we must
ask ourselves - Did it do any good? We think the
short answer is Yes. But it will take time to undo the
narrow preoccupation with economics, which had 15
years head start. The number of people living in
extreme poverty continues to grow.
Conflict,
economic instability, and misgovemance, all
continue to exact a heavy toll on health.
One of the strengths of the Network is the direct
involvement of its members, at local or country level,
in activities that promote health and contribute to
reducing poverty. One of the aims of the Network is
to build partnerships with communities. This means
strengthening communities in their own efforts to
address underlying causes of poverty, social
exclusion and ill health. Such an approach to
addressing poverty and ill-health focuses on people
and in particular the poorest people in all countries.
In 1995, the World Summit for Social Development
strongly endorsed this approach by calling for a
people-centred sustainable development. Goals were
developed from a peoples’ perspective. Now, five
years later we need to revisit the goals and assess
how they have been implemented. We invite you to
participate in that process and to share your
experiences and insights so that the voices of those
directly involved in efforts to reduce poverty and ill
health are heard.
Maga Skbld
Editor
Contact us:
Secretariat of the International Poverty and Health
(IPHN) Network
Department of Health in Sustainable
Development (HSD)
World Health Organization
20, Avenue Appia
CH-1211 Geneva 27
Tel: (41 22) 7912564/2558; Fax: (41 22) 7914153
Email: skoldm@who.ch: iamesonj@who.ch
On the positive side, 107 countries now produce their
own human development reports and many have
initiated poverty eradication programmes. Financial
commitment by international financing institutions
and some governments is on the rise. The 20:20
initiative is gaining gradual commitment to its
proposal that 20 % of external aid be used for basic
social services, provided recipient countries spend
20% of their public budgets for the same purpose.
But we still have is a long way to go. Least
developed countries, particularly in Sub Saharan
Africa, are still marginalized. There is still a big gap
between the international rhetoric and action on the
ground;
between the calls for sustainable
development and poverty reduction to be integrated
with policies for economic growth, and the reluctance
to put the good intentions into practice.
In June 2000 a special 4 day session of the UN
General Assembly will take place in Geneva to look
at progress made since 1995, and to identify how to
accelerate implementation of the commitments made
at Copenhagen. Preparations for this are underway.
The 37th Session of the Commission for Social
Development was held in New York from 9-19
February 1999, focusing on Social Services for All.
During this meeting, WHO called for a new initiative,
which goes beyond social services, to put health at
the centre of future development policy and practice.
Yet we must admit that health professionals also
contribute to the problem, with too many preoccupied
by biomedical and technical approaches to disease,
and not enough acknowledging their roles in fighting
poverty. Until this changes, we risk being accused of
hypocrisy in calling for others to do more for the
health of the poor.
IPHNnews - March 1999 - page 2
NGO Participation in Copenhagen+5
The Preparatory Committee (PrepCom), which will
hold two substantive sessions, is making its work
open to the participation of NGOs, including those in
consultative or roster status with ECOSOC, those
having already submitted an application to ECOSOC,
as well as others accredited to the Social Summit or
other major UN conferences and summits.
Governments are being encouraged to include
representatives of civil society in their national
preparatory processes, as well as in their delegations
to the PrepCom and the special session. Modalities
and conditions for NGO participation in the special
session will be considered at the meeting of the
PrepCom in May 1999 (see enclosed NGLS RoundUp for further information).
Calendar of Follow-Up to Copenhagen +5
• 17-28 May 1999: 1st Preparatory Committee for
Copenhagen +5 at UN/HQ New York
• February
2000:
Commission
for Social
Development at UN/HQ New York
• 3-14 April 2000: Second Session of the
PrepCom, at UN/HQ New York
• 26-30 June 2000: Special Session of the General
Assembly on Copenhagen +5 at UN/Geneva
1995 World Summit for Social Development
In order to share information within the Network on
activities being developed by members, we would like to
hear from you on your involvement in the follow-up of the
Social Summit.
1. Are you, or your institution, involved in any way in
implementation of the Summit recommendations or in the
follow-up activities to the Summit at local, national or
international level?
2. At country level, what has been done so far to
implement the recommendations of the Social Summit?
How has health been used as an entry point to reach the
broader goals of ±e Social Summit, such as poverty
eradication and sustainable human development?
3. In your country, has the government included
representatives from civil society in the national
preparatory process or in the delegation to the Prep. Com
and the Special Session?
4. Will your institution be represented at the Prep. Com
which will take place from 17-28 May 1999? Have you
prepared any position paper, statement, documents or
reports for that meeting which you could share with the
Network?
USEFUL CONTACTS
The United Nations Nongovernmental Liaison
Service (NGLS) was created in 1975 with the aim of
fostering and promoting greater understanding,
dialogue and cooperation between the UN system and
NGOs on development and related issues under
review within the UN system. Initially, NGLS was
seen as a system-wide initiative to strengthen
cooperation with national and regional NGOs and
NGO networks worldwide engaged in development
information, education, and policy advocacy work.
NGLS activities deal with the entire UN sustainable
development agenda across all UN agencies,
programmes, funds and departments concerned with
economic social and humanitarian issues.
NGLS provides information, advice, guidance and
support to NGOs wishing to be more involved in the
UN system, and creates opportunities for dialogue,
interaction and increased mutual understanding and
cooperation. NGLS’s mission statement says, "The
Non-Governmental
Liaison
Service
(NGLS)
promotes dynamic partnership between the United
Nations and non-governmental organisations. By
providing information, advice, expertise and support
services, NGLS is part of the UN’s effort to
strengthen dialogue and win public support for
economic and social development". Other NGLS
activities include:
o
«
•
•
•
joint organization of meetings and other events
with NGOs and UN offices;
maintaining databases on the NGO and UN
communities;
publicizing important UN and NGO development
activities, & publishing development information/
education materials, including the Go Between
newsletter and NGLS Roundup, and information
on UN events, conferences and other activities,
e.g. follow-up to Copenhagen Social Summit;
advice to NGOs on the work of the UN system
and issues on the UN’s agenda and how to engage
in effective information and advocacy work;
monitoring and participating in research,
meetings and publications of various institutions
on the changing roles of NGOs (both north and
south), and their relations with governments and
multilateral organizations.
NGLS publications and more information from:
Mr Tony Hill, Coordinator, UN-NGLS, Palais des
Nations, CH-1211 Geneva 10, Switzerland
Tel: (41 22) 798 5850; Fax: (41 22) 788 736
Email: ngls@unctad.org
IPHNnews - March 1999 - page 3
Meeting of the Advisory Group to the
International Network on Poverty and Health
Since the idea of an International Network on Poverty
and Health was discussed and agreed on at a meeting
in London 1997, the Network has gradually gained
momentum. During 1998 many new members joined
the Network which today is made up of 200
individuals, organizations, business enterprises and
community groups.
In order to consolidate the work of the Network,
agree on key objectives and priorities, and strengthen
participation in the network of people and
organizations in the South, a meeting of a small
advisory group was held in Nairobi and Kisumu,
Kenya during November 23-26, 1998.
Statement of Purpose of the Network:
One of the important elements of the meeting and for
the continuing development of the network was
building consensus amongst the participants, of the
Statement of Purpose of the Network. These were
agreed on as follows:
•
What is the International Poverty and Health
Network?
The IPHN is a world-wide network of people and
organisations from health, business, NGOs,
government and society-in-general who exchange
experiences and share information on the most
effective approaches and solutions for health in
poverty eradication policies, strategies and actions.
•
Who is it for?
People and organisations that wish to influence
policy and action to protect and improve the health
of the world’s poor, with particular emphasis on
the poorest in all countries.
•
What is its aim?
To integrate health into poverty eradication
policies and strategies, promoting community
partnership and intersectoral action, as a means to
achieve effective and sustainable results.
The meeting discussed the main links between
poverty and health and explored some of the
contributions health can make to poverty reduction.
Experiences presented at the meeting from both
developed and developing countries pointed to the
fact that poverty has many dimensions and cannot be
viewed from an economic perspective alone.
Stronger emphasis and consideration needs to be
given to the reality of poor people as experienced and
expressed by themselves, and to the analysis of root
causes and factors that influence or determine
poverty.
Discussions evolved around issues such as the
geographic dimension to poverty which is reflected in
variations in poverty rates across regions within the
same country; the seasonal variations in poverty, a
consequence of the inter-seasonal variations in the
production of food crops leading to periods of want
and "seasons of hunger"; the link between
environmental degradation, ill-health and poverty;
and the macro dimensions to poverty including
economic and political governance.
The question of governance also led to discussions on
forms of participation and on the importance of
community involvement in political and economic
developments and of strengthening the capabilities of
civil society.
There was a broad consensus at the meeting that a
participatory approach to poverty reduction and
community development is desirable both on ethical
and operational grounds. This means listening to how
local people themselves identify the poorest
members, and involving them in the development of
strategies or policies to address poverty. Partnership
building between government, civil society, the
business community, the poor themselves, NGOs and
health professionals was emphasised as the only way
to ensure political commitment to poverty reduction
at a local, national and international level.
The meeting emphasized the need for adopting a
balanced approach to poverty reduction that
addresses both the macro level issues of economic
growth and poverty reduction, and the specific health
needs of the poorest and most vulnerable people.
During the business session of the meeting,
participants identified the stakeholders of the
Network and explored its strengths, weaknesses,
threats and opportunities. In light of these discussions
and of the discussions related to poverty and ill
health, the meeting decided on the following areas of
priority for the Network:
IPHNnews - March 1999 - page 4
1.
Mobilising Stakeholders
•
The aim of mobilising all stakeholders is to ensure
commitment by local, national and international
sectors, business, health professionals, politicians and
researchers etc to poverty reduction and improvement
of health of the poorest populations; and to ensure co
operation between the different sectors to achieve
results in priority areas. This would be done by:
•
•
•
•
•
2.
Developing a clear rationale for business
involvement in poverty and health
Involving
new actors and identifying and
involving stakeholders at local levels
Developing
country specific plans and
mobilising key stakeholders
Disseminating information and experiences.
Writing a joint letter on behalf of the Network, to
all the world’s health professional associations
(and medical journals) to join and share the
mission.
Involvement in Copenhagen Plus 5 Summit
Meeting
•
•
o
o
4.
•
«
Sharing information on what is already been
undertaken by network members and on
developments leading up to the Special Session at
the UN Assembly
Disseminating information on the main outcomes
of the 7 Summits
Consulting national governments on the
implementation of Summit agreements
Participating through the secretariat (WHO) at
the Prep. Coms of the Copenhagen plus 5 process
and
keeping
members
informed
about
developments.
Becoming involved and influencing the agenda at
national level
•
•
•
•
•
3.
Information, Research and Capacity-building
The meeting recognised the need and importance of
collating, exchanging and disseminating information
regarding heath in poverty reduction in order to
strengthen local and national and international
capacities. This would be done through:
•
Promoting evidence based research
community involvement in research
and
Strengthening the Network Development
Efforts will be made to strengthen and expand the
network through the following:
The aim of focusing on the Copenhagen plus 5
meeting is to engage the network in national and
international events and to bring health to the agenda
of poverty reduction strategies. This will be done by:
•
Collecting
research
results,
experiences,
methodologies and best practices relating to
poverty and health
Exchanging and disseminating information
through newsletters, the Internet, existing
networks, publications, national, regional and
international summits and conferences, journals,
political arenas, the media etc.
Storing and retrieving information experiences by
creating a data base and the publishing a
catalogue
Building capacity among health professionals and
people of other disciplines working with
communities in management and governance,
research skills and advocacy methodologies
Producing workable community based models of
addressing poverty and health currently
developed by Network members.
•
Communication and exchange of information
Creating a central web site for the Network with
useful links
Identifying and Mobilising the Network
Resources
Creating /linking up with networks at a national
and international level
The full report of the Kisumu Meeting will be
distributed to all Network members.
*
************
Name the Network
The meeting in Kisumu was keen to come up with a
catchy acronym for the International Poverty and
Health Network - the general feeling was that
"IPHN" didn’t translate well into Spanish and French,
and was therefore too clumsy to be catchy.
After many failed attempts, we were none the wiser,
and decided to ask you, the members of the Network,
to help! What do you suggest ?? Suggestions for
both the name and the logo for the Network will be
welcomed!
The next newsletter will present a selection of the
proposals we receive and a small international group
of members will be asked to make the final decision.
So, it’s over to you!
IPHNnews - March 1999 - page 5
HSb News
EDUCATIONAL RESOURCES FROM THE
WELLCOME TRUST/ CAB INTERNATIONAL
We are delighted to inform you that our department.
Health in Sustainable Development, has a new
director. From Sweden, Mrs Eva Wallstam will be
joining us on 6 April, and on behalf of the Network
we would like to extend a warm welcome to her.
During a short visit to Geneva last week, we asked
her to write few lines to the Network:
A new CD-ROM interactive training programme
to tackle global diseases has been published by the
Wellcome Trust and CAB International (CABI),
entitled Topics in International Health (TIH). This
innovative health training tool was launched in April
1998 and is aimed at medical students, healthcare
professionals, researchers and academics in both
developed and developing countries.
"As new director of the Department of Health in
Sustainable Development I am very pleased to
convey my greetings to the IPHN members. Coming
from Sida, the Swedish Development Cooperation
Agency, where I have been the Head of the Health
Division, and from a country, Sweden, where poverty
alleviation and issues concerning economic and
social equality figure high on the agenda, I have a
strong personal commitment in these matters.
Clearly, poverty is at the root of ill-health and
suffering. Our challenge at WHO will be to define
our role in relation to governments, civil society and
other organizations in order to maximize our
contribution through global advocacy, intersectoral
action, partnerships and involvement in work at the
country level. I intend to try and contribute to raising
WHO’s profile in this area and I am looking forward
to meeting and working together with you and your
organizations as members of the IPHN."
The package currently contains 8 CDs, each focusing
on a disease or group of diseases - Leprosy, Malaria,
Tuberculosis, Trachoma, Diarrhoeal Diseases, Sickle
Cell Disease, Schistosomiasis
and Sexually
Transmitted Diseases. Discs on AEDS/HIV, Nutrition
and Leishmaniasis will be published in 1999.
The CDs focus on training the user in the
epidemiology, diagnosis and treatment of disease,
and offer access to a vast amount of information
through a series of interactive tutorials, an extensive
collection of images and a comprehensive glossary of
medical and scientific terms. The package is highly
visual, fun to use, and extremely accessible, even to
those with little experience of computers.
Each disc costs £95 for developed country
institutions, (discounts on purchases of 4+ titles), and
considerably lower prices for individuals and for
those in developing countries.
Eva Wallstam
Further information on follow-up to the Copenhagen
Social Summit can be obtained by accessing:
http://www.un.org/esa/socdev/wssd.htm
Further information from Liz Woolley
Project Officer, Information for Development
Programme, CAB International (CABI)
Wallingford, Oxon 0X10 8DE, United Kingdom
Tel: 44 1491 832111 x2350; Fax: 44 1491 833508
rnaikl.woolley@cabi.org; Website: http://www.cabi.org
I
Name:
Organization
Address:
would like to become an active member of the International Poverty and Health Network
My particular areas of interest:
What I/my organization can contribute to the Network
Tel
Fax
Email
Please return the completed slip to the IPHN Secretariat at the address given on page 2 of this newsletter
IPHNnews - March 1999 - page 6
Co on H ■ }o. C(S-
BIDS/WHO Presentation for Joint Chief-Planning, MOHFW
11.04.99
HEU. MOHFW
JK
The “Pro-Poor” Agenda in HPSP
The “pro-poor” agenda in HPSP seeks to improve the health and family welfare status of the most
vulnerable women, children and poor in the country. Both the “start point” (“opportunity”) and the
“resource” (“income”) equity position for poor and vulnerable groups needs to be improved. But with
over half the Bangladesh population (130 million) below poverty level (65 million) and resource shortfalls
an open admission for most programs, such improvements are not easily achieved.
HPSP hopes to achieve improvement in opportunity and resources for poor and vulnerable targets through
health sector and multi-sectoral programs that emphasize a population-based approach to:
“client-centered provision and client utilisation of an Essential Services Package,
plus selected services.”
Key indicators for this effort for target populations include:
»
•
•
•
•
•
•
•
•
Reduced maternal mortality
Improved infant mortality
Reduced mortality for female and male children under 5
Communicable disease reduction
Lower rates of unwanted fertility and total fertility rates
Greater life expectancy or females and males
Higher age of women for birth of first child
Improved nutritional status
In general, a healthier life style
These outcomes depend upon key “implementation steps” envisioned as crucial parts of the HPSP agenda:
1.
2.
3.
4.
5.
A fully-funded ESP must be further defined, prioritised, promoted, and implemented in a manner that
improves the above indicators for vulnerable and poor populations as well as for the population at
large.
The effort to unify, restructure, and decentralise service delivery mechanisms for the health sector must
also be reconciled with the special needs of vulnerable and poor populations.
Integrated support systems and multi-sectoral supports that are “pro-poor” must be put in place, along
with meaningful MIS and Behaviour Change Communications programming.
Nutrition and public health components required for dealing with rural and urban health/poverty
problems must be understood and addressed alongside ESP.
“Comparative advantage” regulatory policy changes that links service subsidies with “ability and
willingness to pay” through GO.-NGO partnerships and, where reasonable, an expanded role for the
private sector to relieve the burden on public resources.
BIDS/WHO Presentation for Joint Chief-Planning, MOHFW
11.04.99
HEU, MOHFW
6.
7.
JK
Required hospital level services can be focused upon the needs of key target groups and linked with
ESP services.
Sector-wide program management will be effectively operated and monitored.
Recent studies in the targeting of public expenditures for health (van de Walle and Nead, Public Spending
and the Poor, 1996) suggest that ESP is probably a sound strategy since:
•
•
•
•
Targeting—in the absence of functional tax instruments, manageable social and political conditions,
clear understanding of the costs of targeting—can be difficult to achieve.
Since the poor are less likely to seek treatment and more likely to use less expensive treatments,
primary health care (ESP) probably is still the best way to reach the poor with health and family
planning services.
Pro-poor strategies tend to benefit urban areas more than rural, that non-poor receive a comparatively
greater share of subsidies than do the poor, but that use of health “by” all rises as public spending
increases.
Limited access to facilities probably still means that public spending on health provides greater
marginal benefit to poor children and families than to the non-poor.
If this is so, the “start point” or capability position of Bangladesh will be critical for the HPSP pro-poor
agenda. Briefly, the opportunity context of the HPSP agenda can be summarised in the following points
based on National Health Accounts of HEU (1996/97):
•
•
•
•
•
•
•
•
•
Health sector spending favors non-poor and urban residents, but not public expenditures. Just less
than 1/3 of all health spending and of all GOB spending benefits the richest 20 percent of the
Bangladesh population, while only 1/10 of national spending reaches the poor.
Household spending on private health services and government spending increases with income,
but GOB spending at a lower rate. Ministry of Defense and non-health sector line ministries
account for most of the greater spending for the non-poor. MOHFW spending is relatively equally
distributed across income quintiles.
GOB health subsidies contribute a sizeable part of the overall consumption of health services by
poor Bangladesh families, as well as conferring other benefits.
If HPSP can improve the targeting of GOB subsidies at district, thana an below while reducing
subsidies to the non-poor (middle-upper income, students, military, civil servants), then perhaps
still greater pro-poor effectiveness can be achieved through HPSP.
Outpatient services of district hospitals, thana health complexes, and union/sub-union areas
already benefit the poorest 40 percent of Bangladesh housholds, although urban households at all
income levels use twice as much of thana and district hospital services as other households.
Non-MOHFW spending benefits almost exclusively the richest quintile of households, with these
HHDs absorbing roughly 60 percent of the subsidies with only 10 percent of this spending
benefiting the poorest 40 percent of the population.
Inpatient subsidies are equally distributed throughout all income groups in Bangladesh, a fact
affected by the preference of all households to rely on private spending for outpatient services but
for public hospital inpatient usage by poorer families.
Health spending for males was Tk 406 per capita for females and Tk 461 for males, with private
spending being uch higher for males than for females. GOB subsidies are equally distributed.
Health subsidies are important for those families below the poverty line: poor families have lower
incomes and health subsidies account for a disproportionately high share of their overall goods
and services consumption. NHA comparisons suggest that health subsidies are equivalent to 6
percent of the income of the poorest households and 1 percent of the richest.
2
BIDS/WHO Presentation for Joint Chief-Planning, MOHFW
11.04.99
HEU, MOHFW
JK
• GOB spending has a net re-distributive impact on income: since the burden of financing health
care through taxes and trade levies are generally borne by the higher income quintiles, the
movement of public monies spent on health is from the rich to the poor even though non-MOHFW
spending goes heavily to the non-poor.
• By using health subsidies for selected groups (military, etc), Bangladesh’s pro-poor spending
record is worse than Jamaica, Sri Lanka, and Malaysia where about 28 percent of public spending
goes to the poorest 20 percent of the population.
In this context, HPSP can achieve its goals more effectively by linking ESP expenditures with evidence
based policy changes such as the following:
1.
Policy and management reforms aimed at improving access to modem and effective health services—
facility efficiency and cost-effective services are such a policy approach.
2.
Poverty alleviation policies and programmes that increases the consumption and welfare of the poor
through free or subsidies health and family welfare services—ESP can be such a policy approach as
could be a Health Trust policy for Bangladesh.
3.
Policies promoting insurance or insurance-like mechanisms that protect households against
unpredictable and heavy asset-loss through severe insurance—rural social health insurance or, if done
appropriately, GOB employees health insurance would be such a policy.
4.
Policy measures that increase the consumption of goods and services by the poor relative to
consumption by the non-poor and the rich in the country, including health services—ESP is such a
policy approach.
600
505
Taka per capita
500
□ Government subsidies
H Private spending
400
344
300
239
232
200
100
0
Poorest
2
3
Income quintile
4
Richest
Cor-1 H -^O.C|G
VIABLE ALTERNATIVE APPROACHES TO MEETING THE HEALTH NEEDS
OF THE POOREST AND MOST VULNERABLE:
THE AFRICAN EXPERIENCE
By
P. Anyang’ Nyong’o
Prepared for
THE WHO CONFERENCE ON
“MEETING THE HEALTH NEEDS OF THE POOREST AND MOST
VULNERABLE”
Dhaka, Bangladesh,
11-13 April, 1999
Introduction
The rhetoric is always increasing, the figures are repeated incessantly but the facts are
avoided. That, in brief, is what the crisis on the debate on poverty, health and basic needs
in Africa is all about. There is no doubt that we are entering into the next millenium as
the poorest continent on this earth. There is also no doubt that this poverty occurs in the
midst of plenty of natural resources, a human resource base that could be developed for
the better and societies that have survived grave calamities in history in the past.
The slave trade was a disaster of unparalleled proportion in the history of Africa. Walter
Rodney quite rightly traced Europe's underdevelopment of Africa to this devastating
trade in human flesh.1 This work was complementary to several volumes written by the
British historian, Basil Davidson, depicting the potential for development that was
inherent in African civilizations, but that was deflected by both the slave trade and the
colonial experience.2 Diverse forms of external intrusion sapped the internal dynamics for
future development that African societies had built over long periods of time.
When all is said and done, a society can develop only if, in the first instance, it can
produce and reproduce itself. This begins with the simple biological function of birth and
the survival of the bom within the family unit, and the survival of the family unit within
the wider community. The destruction of the family unit by the slave trade put back the
clock of development in Africa for several decades, if not for even centuries. The
subjugation of whole communities to production for colonial consumption usurped these
communities of the internal strength to produce and reproduce for their needs. The
’ Rodney, W. (1973). How Europe Underdeveloped Africa. Dares Salaam: Tanzania Publishing House.
2 Davidson, B. (1968). Black Mother. London: Oxford University Press.
1
political economy of colonialism has not qualitatively changed, given the dynamics of
political power in Africa and the structure of the world economy. Indeed, national and
international relations and policies still determine the reproduction of the family unit, as
well as communities. Hence, when we see poverty increasing among the rural and urban
poor in Africa, we need to look at the causes of poverty in the political economy of these
societies, and propose solutions that will realistically handle political and economic
dynamics. It is not possible to isolate the most vulnerable sector of the population and
deal with their problems in isolation. Sooner or later, the wider political and economic
environment will encroach on them. Hence a pattern of social transformation,
incorporating the urgent needs of the vulnerable groups, is recommended.
Quality of Population
About 600 million people live in Africa today. Within the next 40 years we shall have 1.6
billion Africans. Every year, the population in Africa increases at about 2.7%, this is
likely to decline to 2.0% in the year 2040. With HIV/AIDS, the death rate is one of the
highest in the world. 15 persons out of 1000 die every year; this could go down to 5 by
2040 if there is improvement in health care.
In developed countries, individuals are, on the average, catered for in terms of health and
sanitation facilities. While in Denmark, 100% of the population have access to clean or
safe water, sanitation and health facilities, in Cameroon only 20% have access to health
facilities, 41% to clean/safe water and 40% to sanitation facilities. Denmark has one of
the lowest infant mortality rates, 5 per thousand; Cameroon’s infant mortality rate stands
at 56 per thousand—one of the lowest in Africa.
Improving Standards of Living
Africa’s hopes for a better future depend in large part on improving the health of its
people. This means better access to those facilities that establish the foundation for good
health from infancy, facilities like safe water and sanitation which are the basis for proper
primary health care. This also means better access to good and high quality health
services, particularly family planning, and the improvement in the health status of
women—the main bearers of reproductive health functions and responsibilities.
The reality of reproductive health in Africa is far from the ideal, and that is why there
continues to be such a high infant mortality rate, ranging from 56 per thousand in
Cameroon and Kenya, to about 140 per thousand in Malawi, Guinea Bissau and Gambia.
It is quite clear that these figures are highly concentrated among poor families within
these countries. Women, among the poor, begin child bearing in their teens, and have an
average of six children. Just 18% use contraception, and the level of unmet need for
family planning -i.e. over one-quarter of married women or more than 222 million—is
higher than in any other region.
Early and frequent child bearing means that 1 in 15 women in Africa dies in pregnancy or
childbirth. Meanwhile, AIDS has struck hard in eastern, central, and southern Africa,
2
where roughly 1 in 10 adults-—both men and women—are infected with HIV. The HIV
infection kills much faster among the poor than the rich; with health costs as high as they
are to-day, it is to be expected that the well to do will find it much easier to meet the
treatment and dietary requirements for prolonging life following HIV infection.
To reduce the possibilities of girl marriages, better and safer opportunities and facilities
for the education of girls will be needed. African countries must expand access to
education for girls and economic opportunities for women. This will require substantial
financial contributions for good public education from governments, households and
donor agencies.
Human Resources Development
Contrary to the current neo-liberal orthodoxy that the state should withdraw from its
social welfare commitments, it is quite clear that a responsible state is now needed, more
than ever before, to invest in Africa’s human resources development. The primary
beneficiaries of this investment must be women and children.
Better educated families are much more likely to make better decisions about family
planning; this has been found as an invariant fact in all societies. Better planned families
will, in turn, lead to increased abilities of families to invest in quality education for the
children. This will further complement the government’s efforts in investing in public
education, hence the general increase in standards of education.
With better education attention to primary health care needs will also increase, reducing
the incidence of preventable diseases, hence the medical care bills.
That is the cycle which initial substantial public investment in health and education will
lead to. It cannot, therefore, be over emphasized that the root towards poverty eradication
lies in human resources development. This is not to mention the fact that an educated
populace ends up to be a source of more productive labor than an ignorant populace.
Agriculture and Land Use Policies
The deterioration of land quality, in combination with poor agricultural practices and
policies, has left Africa less able than ever to feed herself. Food output per person has
dropped by 16% since the early sixties. This is one of the main reasons why close to 40%
of Africans are chronically undernourished and nearly one in three children go hungry
everyday. This malnutrition is a major factor underlying continuing high rates of child
mortality, high rates of primary school drop outs (especially among girls), and poor
performance in school in general of children from poor rural communities.
Agricultural and land policies need to respond to rapid investment requirements for
capital and technology in agricultural production. Reliance on subsistence peasant
agriculture will take Africa nowhere. States that are reluctant to establish tax on land, so
as to stimulate the productive use of arable land—rather than the speculation of landed
3
bureaucratic bourgeoisie—will not take Africa anywhere. Such conservative public
policies are the cause, rather than the cure, of poverty in Africa.
Conclusion
In the final analysis, attention must be paid to culture and ideology in our societies.
Having been greatly inspired by our nationalist movements, the last thirty years have
been a great disappointment in Africa. Except for the Republic of South Africa where
historically significant individuals, like Nelson Mandela, are still alive to remind society
of its heroic past, and inspire people for the challenges that face them, in the rest of
Africa so-called leaders have become public villains.
Cynicism, and a sense of abandon, has seized many people. Individualism asserts itself
with a disturbing sense of legitimacy. Individuals abuse what is meant for the public good
without any disapproval from this same public. This is quite often justified on the basis
that we do, in reality, belong to different publics in African states. The first one, which is
closest to the individual, is usually the tribe, clan or family. Anybody within this public
can commit any public offence in the wider society without any rebuke from members of
the clan, family or tribe. So corruption is thus justified. Laziness in public offices
tolerated. Sheer dishonesty protected from public disapproval. That is why knaves,
thieves and drug traffickers can rule Africa without a problem. Such people can even get
majority votes in elections, and change constitutions to Suit their remaining in office with
the same masses, and the naive middle classes, giving them support.
Obviously no positive change, or development, will come to Africa without proper ideas
for change and positive development being embraced by the people. The WHO and other
groups like the one assembled at this seminar should go beyond discussions to the level
of social practice so as to bring change to Africa. Our tragedy, at the moment, is that we
have not been able to link theory successfully with practice.
It is still not very easy to see how this kind of discussion links with the agenda of trade
unions and governments on women and child labor. Many minors are still used to bear
guns and to fight in war tom countries. Many children still work for long hours in both
the formal and informal sectors because their families are too poor to look after them, or
they simply do not have families. These problems can be addressed if the creation of
wealth, and its use and distribution at both the national and international levels was fairly
and rationally discussed. But we tend to have the middle class mentality that
recommendations from a seminar like this should be addressed “to the government”, as if
the government was a true weather vane ready to respond to any “sensible demand”. In
social practice, we will need to understand what the state really is in our context, how it
will relate to demands from a group like this, and how such demands will coagulate into
political action—which is how history is made.
If states have not been able to respond to recommendations from the WHO, however
rational and sensible, what is the alternative action that the WHO intends to take? We are
all aware that this is a rather uncomfortable question to ask WHO since it is, in the final
4
analysis, an inter-governmental body. But we surely need to know whether we are
involved in mere rituals, or whether governments are, indeed, in search of real solutions
for the world’s most daunting problem like poverty eradication. Eradicating poverty will
cost something. Somebody who is not poor will have to bear this cost. The poor will, in
the end, be the beneficiaries. If the poor do not come from our continent, are we prepared
to pay so that others in another continent will benefit? If the poor do not come from our
community, are we prepared to pay so that the other communities benefit? If the poor do
not come from our family, are we prepared to pay so that the other families benefit?
These are some of the down to earth questions that we need to pose to ourselves. There is
a sense in which these questions are at times not confronted in international forums,
hence we keep on avoiding them precisely because we do not ask them as nakedly as we
should. Time may not be on our side. A whole century is passing. Another one is coming
in. Let us celebrate the passage of this one by taking a great leap forward towards
eradicating poverty within the next few decades.
5
C C’rvi H - >o -
Health
aA healthy person is an under-investigated
patient*
"Faced with an apparently healthy patient, great
care is necessary. In my experience, however,
if you ask enough questions and carry out
enough tests and investigations, you will
always find something suitable for highly
remunerative treatment?
Dr Glamour, Dip. Med. Charlatan, of Harley Street
‘Profitable Private Practice - notes for new Harley
Street practitioners’
in ‘The Doctors Guide to the Market Economy’
Edited by Wanna Lotamoney.
“FEW CHANGES COULD SO
THOROUGHLY UNDERMINE THE VERY
FOUNDATIONS OF OUR FREE SOCIETY
AS THE ACCEPTANCE BY CORPORATE
OFFICIALS OF A SOCIAL
RESPONSIBILITY OTHER THAN TO
MAKE AS MUCH MONEY FOR THEIR
SHAREHOLDERS AS POSSIBLE.”
MILTON FRIEDMAN
The Milner / Clausewitz Political Bravery
Score
—I
2
3
4
5
6
7
8
9__ ,10
10 points ~ the full Milner
(politically brave but faces early retirement)
1 point = a complete Clausewitz
(long term survivor who achieves little but survival)
‘If we believe a thing to be bad, and if we have
the right to prevent it, it is our duty to try and
prevent it and damn the consequences.’
Lord Milner, 1854-1925
(speech in Glasgow, 26th November 1909)
‘Generals and politicians have at all times
avoided the decisive battle preferring either to
achieve their aims unperceived, or drop those
aims altogether.’
Clausewitz,(1780-1831) ‘On War’ ,1808
Copyright: Olsen, 1992)
‘It is a logical corollary to the payment
of high benefits in disability that
determined efforts should be made by
the State to reduce the number of cases
for which benefit is needed'
Beveridge Report 1942
Expectation of Life at Birth
England and Wales 1891 - 1993
79.1
80 -i
71.5
70 £ 60 o
o 40 c
o
5 30 o
0)
§20-
10 0 J
1950-1952
Males
1991-93
W Females
Source: OPCS Mortality Statistics, Series DH1 (1891-1952) and Government Actuary's Department
20
Half of all the children will die before
8 years of age. This is an immutable
figure, do not try and change it.
Rousseau, 1762
Figure 2.2
Infant Mortality Rates
1846 - 1994
Death Rate per 1,000 Live Births (log scale)
England and Wales
1846
1861
1876
1891
1906
1921
Source: OPCS Birth Statistics, Mortality Statistics: childhood, and Updates no,6
1936
1951
1966
1981
1994
Mortality in Childhood 1993-5
SOCIAL CLmSS
Stillbirth Perinatal
Infant
1
Professional
11
Managerial
111N Skilled Non manual
111M Skilled manual
1V
Partly skilled
V
Unskilled
4.5
4.5
5.4
5.4
6.2
7.8
7
7.3
8.4
8.5
9.9
11.5
4.5
4.8
5.5
5.9
6.6
7.7
England and Wales
5.5
8.7
5.9
Stillbirth rate: the number of stillbirths per 1000 total'births.
Perinatal Mortality rate: the number of stillbirths plus the number of
deaths of babies under 7 days old per 1,000 total births.
Infant Mortality Rate: the number of child deaths under 1 year old.
HEALTH STATUS
r
AGE
‘Adding years to life and life to years ’
HEALTH,
A CONDITION OF COMPLETE
MENTAL PHYSICAL AND SOCIAL
WELL-BEING AND NOT MERELY
THE ABSENCE OF DISEASE OR
DISABILITY W.H.p.
Health:
Health is about coping
with the difficulties of life
National Heart Forum
The National Flearl Forum (formerly the National Forum for Coronary Heart
Disease Prevention) is an alliance of over 35 national organisations concerned
with the prevention of coronary heart disease. Members represent the health
services, professional bodies, consumer groups and voluntary organisations.
The mission of the National Heart Forum is to work with and through its
members to achieve a reduction in coronary heart disease mortality and
morbidity rates throughout the UK. It has four main objectives:
■
to keep under review the activities of member organisations and
disseminate findings
"
to identify areas of consensus, issues of controversy, and needs
for action
■
to facilitate the coordination of activities between interested
organisations
■
to make recommendations where appropriate.
Member organisations
Northern Ireland Chest, Heart and Stroke Association
ASH (Action on Smoking and Health)
Royal College of General Practitioners
Royal College of Nursing
ASH Scotland
Association for Public Health
Association of Facilitators in Primary Care
Royal College of Paediatrics and Child Health
Royal College of Physicians of Edinburgh
British Association for Cardiac Rehabilitation
Royal College of Physicians of London
British Cardiac Society
Royal College of Surgeons of England
Royal Institute of Public Health and Hygiene and the Society of Public
British Dietetic Association
Royal Pharmaceutical Society of Great Britain
British Heart Foundation
SHARP (Scottish Heart and Arterial disease Risk Prevention)
British Medical Association
British Nutrition Foundation
Society of Cardiothoracic Surgeons
Chartered Institute of Environmental Health
Society of Health Education and Health Promotion Specialists
Community Practitioners' and Health Visitors' Association
Society of Occupational Medicine
Trades Union Congress
Consumers' Association
The Wellcome Trust
CORDA
Coronary Prevention Group
English Sports Council
Observer organisations
Faculty of Public Health Medicine
Department of Health
Family Heart Association
Department of Health and Social Services, Northern Ireland
Health Education Authority
Medical Research Council
Health Promotion Agency for Northern Ireland
Ministry' of Agriculture, Fisheries and Food
Health Promotion Wales
National Consumer Council
National Association of Governors and Managers
Scottish Consumer Council
The NHS Confederation
Scottish Office, Department of Health
Welsh Office
In addition, a number of distinguished experts in the field have individual
membership.
‘Health Impact Assessment (HIA) is a methodology which aims to
identify, predict and evaluate the likely changes in health risk, both
positive and negative (single or collective) of a policy, programme,
plan ,or development action on a defined population. Ideally, health
impact assessments should always include consideration of physical,
mental and social impacts. ’
(Health and Environmental Impact Assessment: An integrated approach British Medical
Association / Earthscan 1998)
Health impact assessment
Ideally, assessments should be:
• multidisciplinary
• participatory
• equity-focused
• qualitative as well as quantitative
• r lulti-method
• explicit in their values and politics, and
• open to public scrutiny
"The therapeusis ©f S©cfa3 Medicine is not medical
but social and political'action based upon medical
recommendations.
Many a heaHh problem of great concern to society
is already solved yet remains untouched since
adequate social action has not yet been unleashed.
For this reason Social Medicine must be exceedingly
active in the field of health education - the
education of the citizen and the politician,
local and centralI
Professor F A E Crew, Professor of Public Health Medicine,
University of Edinburgh, in "The Measurement of Public Health", 1948
I
"UNPOPULAR" PREVENTION
FOR UNPOPULAR PREVENTION TO BE FEASIBLE -
There must be a critical level of political and
public knowledge of the rationale and benefits of
the action
I
“WELL LONE INVESTIGATIVE
REPORTING PRODUCES PUBLIC
OUTRAGE (OR POLICY MAKER
OUTRAGE) THAT FORCES NEW
REGULATIONS AND LAWS OR
TOUGHER ENFORCEMENT OF
EXISTING ONES. TEN THOUSAND
WATT LIGHTS TURNED ON A
SITUATION FOCUSES THE MINDS
OF POLICY MAKERS VERY FAST.
ALAN OTTEN, WALL STREET JOURNAL
Our Healthier Nation, 1998
Introduction, Frank Dobson & Tessa Jowell
‘We want to see far more attention and Government action concentrated on the things
which damage people’s health which are beyond the control of the individual.’
‘The National contract for better health recognises that the Government can create the
climate for our health to be improved. It pledges to deliver key economic and social
policies. It places requirements on local services to make progress in improving the
public’s health.’ (3.7)
‘Leadership and co-ordinated government
To deliver their part .... a range of Government Departments will need to work together. The
Government has already taken two key steps to ensure that health is a central theme of
Government policy.
• First, for the first time ever in England the Government has appointed a Minister of Public
Health to ensure co-ordination of health policy across Government. The Government has set
up a dedicated Cabinet Committee of Ministers from twelve different Departments to drive the
policy across Government.
• Second, the Government will apply Health Impact Assessment to its relevant key policies, so
that when they are being developed and implemented, the consequences of those policies for
our health is considered.’ Our Healthier Nation, 1998. (3.11)
WHO and Bangladesh Institute of Development Studies.
Dhaka, Bangladesh, 11th - 13th April 1999.
‘Viable alternative approaches to meeting the health needs of
the poorest and most vulnerable: the British experience.’
Dr Noel D.L. Olsen, FRCP, FFPHM.
Public Health Physician
BMA Representative, Intercollegiate Forum on Poverty and Health
Chair, Public Health Policy sub-Committee of the BMA
Hon Sec, International Agency on Tobacco Control.
Member, BMA Board of Science and Education
Chair, Public Health Medicine Consultative Committee, UK, (1994-98)
Hon Sec, Action on Smoking and Health, (1975-1984.)
Hon Sec, National Forum for Coronary Heart Disease Prevention.
(1988-95.)
BMA Council, 1993-98.
The Medical profession and its organisations as
advocates for health and the relief of poverty.
The long-term interests of the medical
profession will always be best served by
striving for the highest possible
standards c; hearth care, and by strong
advocacy for the healthiest possible
social, economic and environmental
policies.
I
If we believe a thing to be bad. and if
.■
r
we have a right to prevent it it is our
I
duty to try and prevent it and damn
the consequences.
I
I
I
s
Lord Milner
‘the primary determinants
of disease are mainly
economic and social, and
therefore its remedies
must also be economic
and social’
Geoffrey Rose
Human rights
‘Everyone has the right to a standard of living
adequate for the health and well being of
himself and of his family, including food,
clothing, housing and medical care and
necessary social services, and the right to
security in the event of unemployment,
sickness, disability, widowhood, old age or
other lack of livelihood in circumstances
beyond his control.’
Article 25 (i), Universal Declaration of Human Rights
Mortality of men aged 15-64 at death by
social class: SIMR for England and Wales
1949-53 1979 83
1
Professional
11
Managerial
111N Skilled non-manual
111M Sailed manual
1V
Partly skilled
V
Unskilled
Source : Variations in Health DoH Feb 1996
86
92
101
101
104
118
66
74
93
103
114
159
Mortality and social class
SMR by social class - men aged 20-64
Social class
1
Professional
11
Managerial
111N Skilled Non manual
111M Skilled manual
1V
Partly skilled
V
Unskilled
England and Wales
Ischaemic
heart disease
63*
73*
107*
125*
121*
182*
Stroke'
100
100
‘Health Inequalities’ Ed. Dreverand Whitehead.
Stationery Office London 1997
70*
67*
96
118*
125*
219*
Fuel Poverty:
Any household using 10% or more of its
annual income keeping warm:
England (17 million households)
10%+ -
7 million households
20%+ - 2.5 million
30%+
1 million
PUBLIC HEALTH
The Science and ort of preventing
disease, prolonging life and
promoting health through
organised efforts of society
Acheson Report - Public Health in England
PUBLIC HEALTH MEDICINE
Concerned with:
health of the population
-
creating a health agenda throughout
society
-
health of the environment
physical
social
economic
quality of health services
purchasing health care
"PUBLIC HEALTH IS PUBUC WEALTH*
Benjamin Franklin
The h@©ilhi ©f the people is
really the foundation opon which all
their happiness and all their
powers as a state depend
Benjamin Disraeli
7
L
I
Occasional Paper
Inequalities
in health
British Medical Association
Board of Science and Education
The range of reports over the years has advanced the quality
of social and environmental debate and given the BMA a
highly regarded reputation for public health advocacy. The
reputation of the Board and its work gives legitimacy to
Articles (1) and (4) of the BMA:
(1) To promote the medical and allied sciences, and to
maintain the honour and interests of the medical
profession.
o (4) To grant sums of money out of the funds of the
Association for the promotion of the medical and allied
sciences in such manner as may from time to time be
determined
o
The BMA deplores moves by multinational tobacco companies to increase
sales in third world countries.
Annual Representative Meeting, BMA, 1993
Aim of Health Impact Assessment Policy
To improve the public health by adding a health perspective
to policy at every level, and making concern for public health and equity
a cultural/political norm and a humanitarian issue.
Health Impact Assessment has the potential to become as important to
the improvement of public health as the randomised controlled clinical
trial has been to the improvement of clinical medicine.
:
PHARMACY
OF PREVENTIVE
MEDICINE IS THE
HOUSE OF COMMONS
•P>W>-<:<<;<>.>;>;^:
THE
"POPULAR" PREVENTION
EDUCATIONAL - approach
INFORMATION giving in hope that
KNOWLEDGE will increase
ATTITUDE change will occur
BEHAVIOUR will be modified
At least rt creates an environment in whsch further action is possible
"UNPOPULAR" PREVENTION
- Use of legislative, fiscal and social restrictions
PROFESSIONALS
OPINION
FORMERS
L.
OF
OPINION
VOLUNTARY
BODIES
PUBLIC
BODIES
GOVERNMENT
v
, 3S&SS
*
S'.-'* '
i
s e.'s?
“IN OUR SOCIETY PUBLIC
MEDIA ARE IRREPLACEABLE
AS A MECHANISM FOR MOVING
A PROBLEM TO A SOLUTION”
GEORGE LUNDBERG, EDITOR, JOURNAL OF
THE AMERICAN MEDICAL ASSOCIA TION
Governments gain improvements in public
health:
• by education
© through greater social justice and the
reduction of inequality
© by improving the quality of health care
services
o
by assessing the health effects of all
government policy and programmes and
adding health gain to them when feasible
(‘Health Impact Assessment’)
• by public health law and targeted action
programmes including the regulation of
commercial organisations
from: Healthy Public Policy: improving the health and quality of life of
the population - the task of the new Minister of Public Health.
Dr NDL Olsen, MSc, FRCP, FFPHM.
There is nothing more cfifffcult m©re perilous
to conduct nor more uncertain in its success,
than to take the lead in a new order of things.
The innovator has for enemies all those who have
done well under the ©id conditions and lukewarm
supporters in those who may do well under the new.
This coolness arises parfly from fear of the
opponents who have the law on their side and partly
from the incredulity of men who do not readily
believe in new things until they have
experience of them.
1.
1
1
1
i.
1
•
I____
1____
Machiavelli - The Prince
1
Cor'-'} H -7-0. M'g-
BREAKING THE VICIOUS CIRCLE OF POVERTY USING HEALTH:
AN ANALYSIS OF POSSIBLE ROUTES
Binayak Sen
A Paper Circulated in Connection with the International Workshop on "Meeting the Health
Needs of the Poorest and the Most Vulnerable" Organised by BIDS and WHO
11-13 April, 1999,
Dhaka, Bangladesh
BREAKING THE VICIOUS CIRCLE OF POVERTY USING HEALTH:
AN ANALYSIS OF POSSIBLE ROUTES
Binayak Sen*
“[Poverty and undernourishment] belong to different categories of phenomena. Poverty is, of
course, a central cause of undernourishment; but.. it is in turn perpetuated by undernourishment.
We have seen that this two-way influence must be central to any account of destitution and its
relief. To date I have seen no numerical model that is built on this fact. There is much that remains
to be done."
Partha Dasgupta: An Inquiry into
Well-Being and Destitution (1993)
The two-way Causality
The two-way causality running between health and poverty reduction is well recognised in the
literature. The causality that runs from poverty to health (let's call it the "poverty-health" loop) is
well-documented. The wealth effects on health run through two major channels:
(a)
public allocations in health and nutrition, and
(b)
reduction of income-poverty.
A large body of cross-country evidence from the developing world supports the thesis of “wealthier
is healthier”. The pioneering study done by Sudhir Anand and Martin Ravallion (1993) shows, in
addition, that lower income-poverty levels are associated with higher health status of the nations,
even when average level of affluence and per capita public expenditures on health are controlled
for. The relationship is found particularly steep at low-income level, implying higher returns on
investments in public health in low-income environments. The analytical link underlying the
poverty-health loop rests on two observations. First, rise in private incomes leads to higher
household demand for health (purchasing power effect). Second, income-poor typically have “low
voices (empowerment-effect). As a result of both the effects, the poor tend to have poor quality of
public health care over and above the issue of limited access.
Less understood, however, are the routes through which health impacts on poverty and vice versa.
This note attempts to clarify some of the issues involved in identifying the possible routes. In this
note we mainly focus on that side of the causality which links ill health to poverty (let's call it the
* Senior Research Fellow, BIDS. E-mail: bsen@bdonline.com. This note is an adopted version of the broader paper
forthcoming as a WHO publication
"health-poverty loop”). This loop specifically explores the mechanisms through which health
interventions can protect the poor from going down the poverty spiral and increase their chances to
get out of the poverty trap. As a result, investing in poor people’s health can be an effective
strategy for faster poverty reduction.1
The other side of the causality connecting poverty reduction to health, i.e., how a reduction in
income-poverty would lead to better health status, receives peripheral attention here. This is partly
because it is perceived as being less contentious aspect in the formative discourse on the health
poverty interface.
The term “health” is used throughout in this note in the broader sense, i.e., not just to denote bio
medical approach to health care, but also to include nutrition, health education and mental health.
The Health-Poverty Loop: Unraveling the Links
One can identify four approaches signifying the health-poverty loop:
(i)
the capability approach;
(ii)
the risk-insurance approach;
(iii)
the human capital approach;
(iv)
the social capital approach;
The Capability Approach
The first approach works at the fundamental level of understanding of what economic development
and income poverty reduction is all about.2 It attests to the need of recognising that economic
development such as growth of GDP per head and income poverty reduction such as drop in
1 Not just any investment in health will do. Interventions consistent with socially perceived health needs of the poor,
articulated at individual, family, and community levels, have the better chance to succeed and to be sustainable.
2 This strand of thinking has been a long established tradition in the social justice literature and, in recent years, gaining
increasing ground in the mainstream economic literature as well. One could specially mention here the oeuvre of
Amartya Sen, and those inspired by him, including but not restricted to the works of Ravi Kanbur, Sudhir Anand, Martin
Ravallion, and Siddiq Osmani
C.Wy Documents'i&nayak\Seminart-ieaith.ooc
2
headcount are not ends or goals in themselves.3 The central importance of these factors lie in so
far as they allow to enhance individual’s capability to live a healthy, decent and creative life. Note
that increase in health capability is achievable, in principle, even without going via media of
economic growth and income poverty reduction, through public action for instance. Mixing means
with ends, and ends with goals, have led in the past to a very narrow developmentalism, de
emphasising the importance of direct health and non-health social interventions for enhancing the
health capability of the poor. The distinct feature of this approach lies in emphasising the
importance of health interventions even if the latter do not lead to any improvement in dimensions
of growth or income-poverty reduction. In this sense, it under-scores the human rights argument.
However, investments in health can bring win-win (to use World Bank terminology) results both in
terms of equity and efficiency. Raising health capability
has instrumental importance in
accelerating development and poverty as well. The importance of health is vindicated even if we
define development and poverty in strict (and narrow) economic terms.
The Risk-Insurance Approach
The risk-insurance approach shows how effective health interventions targeted to the poor can
protect the latter from the risk of sudden slippage into poverty.4 According to this approach, poverty
reduction cannot be considered in terms of income generation alone. It must explicitly recognise
the need for preventing income erosion as well. The poor often find themselves living in a fragile
environmental and social settings with considerable risks of income erosion. Ill health further
increases such risks.
The way ill-health related income erosion actually intensifies poverty can be seen in three
dimensions. This can be illustrated by considering the case when breadwinners suddenly become
ill. First, illness is directly associated with loss of productivity and employment and, hence, loss of
income. Such loss can be considerable in the state of prolonged illness. Second, sudden illness of
3 Note that not every end is a goal, though they are inter-connected. The end of a melody, for instance, is not its goal;
but nonetheless, if the melody had not reached its end, it would not have reached its goal either.
4 The approach builds on the literature on risks insurance, beginning with Kenneth Arrow, and has attracted since then
many economists and social scientists. Recent works done by Robert Townsend, Christian Paxson, Martin Ravallion,
and Jonathan Morduch (to name the few) can be relevant points of departure in this regard.
C:\My Documents’vBinayak\Semlnarirtealth.doc
3
the breadwinners increases the degree of vulnerability of the poor families to often-unpredictable
fluctuations in employment, income and consumption. This potentially contains severe nutritional
implications for the children, women, and the elderly living in that family. Third, given the severe
credit market constraints in developing countries, the poor often have very limited resources at
their disposal to cope with the crisis arising out of health-shocks. Available options generally fall
under the category of “negative coping", i.e., by way of assets sales, forward sales of labour on
unfavourable terms, or borrowing on high interest rates.5 The use of negative coping mechanism
further undermines the long-term capacities of the poor for moving out of the poverty trap.
Note that the exposure to health risks and, consequently, the burden of income erosion is not
homogeneous across the social groups. The burden falls disproportionately on the poorest and the
most vulnerable population.
The Human Capital Approach
The essence of this approach lies in its focus on productivity effects of human capital.6 Improved
health leads to higher labour productivity and hence, higher income and lower poverty. This can be
seen in a number of ways. First, ill health and malnutrition reduces the physical capacity and
mental faculty of the labourer, leading to lower productivity and reduced bargaining power,
resulting in lower wages. Second, one insight from the "efficiency wage” literature favours health
based transfer programmes even on efficiency grounds. According to this view, chronically
sick/malnourished workers may not get hired at any wage, thereby falling into a health/nutrition
based poverty trap. In such cases transfer programmes promoting greater health equity would not
only be poverty reducing, but also efficiency-enhancing. Third, expanding the opportunities for
better health through public action can assist the poor release resources for other investments, for
example, to invest in education as a way of climbing out of poverty. Fourth, as is known, human
capital includes three elements: education, health care and nutrition. These elements tend to have
? It is important to distinguish “negative" from “positive" coping mechanism. The latter includes taking recourse to own
savings, access to soft loans, use of community grain bank facility, and other forms of mutual assistance embedded in
the moral economy of the communities.
6 The approach, inspired by the works of Jacob Mincer and T.W. Schultz, has gained further currency in recent period
in connection with theories in the tradition of endogeneous growth, involving works done by Paul Romer, Robert Barro,
Xavier Sala-i-Martin, Jeffrey Sachs, Andrew Warner, to name the few.
C;tMy Documc-nls\Binay3k\Se<n:nartHeaRh.doc
4
synergistic effects on each other. Some of the effects of health on poverty run through indirectly via
influencing other two sister elements, i.e., nutrition and education.7*
The above relationship observed between better health and poverty reduction is vindicated by both
micro and macro level evidence. Indian state level data mapping a period of about 40 years remain
a pointer to this. The independent impact of health on poverty stands out even after controlling for
the differences in the initial level of income, gaps in physical asset endowments (proxied by
irrigation rate), and allowing for the change in time-dependent variables such as agricultural yield.
Regions with improved health status (such as lower infant mortality) and better education (such as
higher adult literacy) tend to have higher economic growth and faster poverty reduction rate.0
The Social Capital Approach
The importance of social capital for fighting poverty is gaining increasing recognition in the
literature.9 Social capital essentially focuses on building a civic life through the creation of social
networks based on trust, cooperation, and participation in areas of common community concern.10
According to this approach, health can help to reduce poverty in so far as it contributes to the
formation or re-building of social capital at the community level. Community-based health
interventions can be an effective entry point in triggering off processes that lead to greater
community empowerment and hence, help release the anti-poverty initiatives coming from within
the community itself.
7 There is a growing body of evidence that health is a major explanator of child nutrition and schooling performance.
The latter, in turn, determine the long-term (inter-generational) potentials of the poor families to get out of poverty. The
nexus between health and nutrition, health and education can be seen from the works done by Jere Behrman, Harold
Aiderman, Richard Sabot, Dean Jamison, Duncan Thomas, to name the few.
3 This may be tested with cross-country data (despite noise in international poverty data derived under diverse survey
designs and methods) which is a potentially interesting area for further research Some works have been initiated in
this direction, notably in the works of Jeffrey Sachs and Andrew Warner, Alok Bhargava and Siddiq Osmani.
9 The “social capital” approach is originally inspired by the pioneering work of Robert Putnam, and has a lot in common
with the earlier literature focussing on the relationship between state, civil society, and poor community, with explicit
recognition of participatory methods and practices as equally valid source of evidence and knowledge as the more
formalistic, “scientist" and “objective" forms of learning about reality.
10 Two words in the Bantu language of South Africa capture the spirit of social capital: “uglolana" meaning “building
each other", and “uakana" meaning “sharpening each other".
C:\My Oocurrents'Binayak\SeminariHeafth.doc
5
The importance of seeking such an entry point at community level is particularly important in view
of the fact that many of the conventional anti-poverty programmes operate only at the level of
households or individuals. Microcredit programmes targeted at the poor are usually designed for
household/individual based interventions, and often can by-pass the need for engaging with the
entire community. This is not to say that such targeted credit programmes are not beneficial to the
poor. The point at stake is that the income generating effects arising out of microcredit may help
some to get out of poverty without necessarily creating the desired social multiplier effects for the
entire poor community which is the main concern of the social capital approach.11
The tension between "target group” and "community-based” approach need not be absolutised
though. Both can benefit from each other. The poverty-reducing effects of microcredit can be
magnified with effective health intervention at community level. Similarly, the poorest and the most
vulnerable merit separate attention in the overall context of community-based intervention strategy
so that they can be “visibilised” and their voices and specific needs can get adequate articulation.
11 That this is not a remote possibility can be seen from the fact that microcredit programmes by their very design often
tend to by-pass the very poor households.
CrV.ly Documents'SinayaMScfninartHeailh.doc
6
Go>-v\ H -
Speech of Alhaj Salah Uddin Yusuf, Honourable
Minister for Health and Family Welfare
on the occasion of the inaugural session of the
workshop :
“ Meeting the Health Needs of the Poorest and the
Most Vulnerable” -11,12 and 13 April - Dhaka.
Honorable Chairperson, Dr Lokky Wai, Acting WHO
Representative, Dr Rehman Sobhan, learned resource persons and
other participants, Regional and Head Quarters WHO
representatives, distinguished guests from home and abroad,
friends from different media services, Ladies and Gentlemen.
Assala Mu Alaikum
I am very pleased to see such a joint effort on poverty
alleviation, bringing together here so man)7 stakeholders like bi
lateral donors, NGOs, Institutions, UN Agencies. It is a great
pleasure for me to be with you at the inaugural session of the
workshop11 Meeting the Health Needs of the Poorest and the Most
Vulnerable” jointly organized by WHO and BIDS.
Now 1 take the opportunity to refer to a recent message given
by our Honorable Prime Minister Shiekh Hasina at the Conference
on Global Health Equity Initiative. She eloquently said:
The question of inequity in different aspects of life is a global
problem. Bangladesh is no exception. Inequity or inequality
between rich and poor, between rural and urban areas and
among different regions is a matter of great concern here.
This inequality is present in almost all aspects of life education, health or income distribution. There are plenty of
statistics to prove the existence of such inequities. Let us
consider health. In Bangladesh, the mortality and morbidity
rates are much higher among the poor than the well-to-do. A
recent survey has found 72% higher morbidity among the
poor than the richer section of the community. The condition
of women is much more unacceptable. Bangladesh is one of
the three countries of the world where the life expectancy of
women is less than men. (speech by Sheikh llasina Prime Minister
■■felicitation ol Professor Amartya Sen and closing ceremony ol'lhc Conference of
Global Health l-quily Initiative', Dhaka. 17 December 1998)
In Bangladesh we have a very real and pressing problem to
address the health and development needs of poorest of the poor.
I would like to congratulate WHO and BIDS for organizing
this workshop which will definitely help in the implementation of
the Health and Population Sector Programme (HPSP) which has
been launched since July 1998. Under HPSP and within the five
years period of implementation, the Ministry of Health and Family
Welfare is going to set up 13,500 Community Clinics, each one
serving 6,000 people. Through these Community Clinics we are
going to deliver quality health and family planning services to the
poorest and most vulnerable population. These Community Clinics
will ensure client oriented services. The core of HPSP is the
delivery of the Essential Services Pakage (ESP) which will cover
reproductive health, child health care, communicable diseases,
limited curative care and behavioral changes communication
(BCC). I would like to mention here that about 65% of the total
cost of HPSP will be spent at community level trying to meet
especially the health needs of the poorest and most vulnerable
people of the community.
I think this workshop will give an opportunity to share
experiences, successes and constraints of NGOs community, of
institutions, of international and national agencies as well as of the
government programs in tackling poverty and in addressing the
important link between health and poverty.
Poverty alleviation needs an inter sectoral approach. I think
you will agree with the new Director General of WHO. She has
mentioned that: “In tackling poverty and its myriad effects on
health we will require effective advocates of health interests in
other fields, such as fiscal or trade policy, food security or accident
prevention - where the primary responsibility lies with other
Sectors . ( Dr Gio Harlem Brunt land. Speech to the King's I'nnd. London. LI January
1999.)
Bangladesh is rich in experiences and we hope by the end of
the proceedings of this workshop to develop a model of
intervention which could be applied nationally and even
internationally to minimize the adverse effects of poverty on
health.
In order to meet our international obligations as expressed in
many agreements including the Copenhagen Declaration we must
listen to our own people and their many successes in serving the
poor in this country. The rich experiences of many many NGOs is
well known, but by their very nature, they are limited
geographically, economically and most especially in scale. In this
respect the Government of Bangladesh and WHO are eager to
learn, cooperate and collaborate to bring about health for all
especially for the poorest and the most vulnerable. With all
possible partners we need to develop a strategy of success to bring
about significant changes.
Bangladesh, has a proud history of survival. The freedom
Fighters wanted health for all and equity as the right of each
citizen, for them to have the dignity of work and adequate food.
Unless there is good health, the economic situation of the
country can not prosper. Healthy workers can contribute to a
healthy economy. Poverty elimination leads to sustainable
development. We can not let vested interests stand in the way of
national interests. The. welfare of the people is the welfare of the
country.
The people of Bangladesh have a great spirit to succeed and
the opportunity will prosper. The Government of Bangladesh has
a strong political commitment to fight poverty, however, we need
to work hard all of us together.
■i
Health has a major part to play in poverty alleviation. We
must put health at the centre of the political agenda. WI10 says
that poverty is the main cause of ill health. We must organize and
streamline our work to focus on health in development while at the
same time linking with other relevant sectors.
We, in Bangladesh, can by our rich experience draw together
high level political commitment, WHO health goals, international
and national development policies and experiences and come up
with a model for sustainable development and human dignity.
We fought for freedom, now let us fight for equity and
humanity and a decent standard of healthy living for the poorest
and the most vulnerable people of the community.
At the end 1 would like to thank the WHO and BIDS for
jointly organizing this workshop at a time when the Ministry of
Health and Family Welfare has started implementing 11 PSP by
unifying the services and the staff of both the Directorate of Health
Services and Directorate of Family Planning. I have firm belief
that this workshop will come out with some pragmatic and
valuable recommendations which will be very useful for meeting
the health needs of the poorest and the most vulnerable.
With these few words 1 do hereby declare the workshop
open. Thank you again.
Khoda I lafiz.
Joy Bangla
Joy Bangabandhu.
Bangladesh Chiroj ibi Hoke
?»WK)N
id^ toi\j ceM £
Mr Chairman
C^h- To. so
•» ’ Honourable Minister of Health
Distinguished Guests
■~ . •
Colleagues
It is my honour and pleasure to begin this first technical session of our
meeting. It is an added pleasure for me since I started my public health
£ career here in Bangladesh - in Khulna, Bagherhat and Gopalganj, to be
precise - way back in 1973, with Save the Children Fund.
Mr Chairman, health and wealth are inextricably linked. There is a wide
range of evidence to support that fact. We have known for a long time
that absolute poverty - which implies a lack of the basic resources
necessary7 for survival - is associated with ill health and premature
mortality. In fact absolute poverty is the leading cause of ill health in
less developed countries. So the fact that the number of people living in
absolute poverty continues to increase should be a matter of the gravest
concern for those of us in health.
0 In addition, research from the industrialized countries shows that relative
poverty and socio-economic inequity - defined in terms of those living
below a given national average - is also a major determinant of ill health.
For example, studies of life expectancy in the United States show that
an affluent white woman can expect to live 41 years longer than an
African American man. In UK a child born today in the highest social
class can expect to live 5 years longer than a child born among the
poorest. The Honourable Minister of Health has earlier referred to the
situation in Bangladesh - 72 per cent higher morbidity amongst the poor
compared to the well-off, life expectancy for women lower than for men.
I
I am starting with these points in order to get our discussion past the
question - is there a linkage between povery, inequity and health?
There is, it is strong.
We often pride ourselves on the health gains which have been achieved
during this remarkable century of human development. Today average
life expectancy in developing countries has reached 64 years. It is
projected to reach 71 years by 2020. But poverty is eating away at many
of those gains. If we are not careful we risk going down in history as the
generation that allowed hard won health achievements of the century to
be lost. We must take action.
What are the global facts?
One fifth of human beings do not have access to acceptable basic
healthcare. Half do not have regular access to essential drugs.
One billion people do not have access to safe drinking water. Three
billion do not have access to sanitary waste disposal.
Less developed countries carry 90 per cent of the global disease burden
but have access only to 10 per cent of resources for health.
Between 1996 and 1997 the Human Development Index declined in
more than 30 countries. In Africa the average household consumes 20
per cent less than it did 25 years ago. According to Professor Amartya
Sen - who needs no introduction to this audience - the median age of
death in most countries of sub-Saharan Africa is around 5 years. In
some it is 2 years.
For the past 20 years our global health strategy - Health For AH - has
been based on the principle and value of equity. But inequities have
been getting worse, not better - not only between rich and poor countries
2
but within countries as well. The predominant focus in many countries
has been on improving the economic and soical wellbeing of the middle
income groups and those that are already well-off. The poorest have
been excluded. That situation must be changed. In future we must make
room for the very poor - in the interests of Health For All. We must do
much more to prevent and reduce poverty itself.
Health has an important role to play - in poverty reduction, poverty
prevention as well as alleviating the sickness which poverty provokes.
That is the central message of this meeting. By health I mean not only
the activities of the health sector and health professionals but also what
other sectors can do to improve health status (such as education of girls)
and reduce health risks (such as water and air pollution).
It is a message that we in health have been slow to promote. We are
more accustomed to looking at heath as an end in itself. It is time for us
to change our focus, to think through the implications of health’s
contribution to preventing and reducing poverty.
What is health’s anti-poverty role? Flow can it be put into operation?
At the core of recent development thinking lies a new awareness of the
importance of the capability of human beings to live a healthy and
productivity life and of the importance of social and human capital.
These refer to the collective accumulation of knowledge, skills,
experience and innovation which people contribute to productivity and
ultimately to human development. Dr Binayak Sen will refer more
directly to these concepts so I will not go further.
Health, education and good nutrition are essential for building and
maintaining human capital. The rapid economic growth in East Asia
(until it was interrupted by the recent economic crisis) owed much to
strong investment by the governments of those countries over the past 30
years in education and basic health services, including reproductive
health, provision of safe drinking water and control of communicable
diseases.
What does this mean for the organization of health services? The most
basic principle is the need to ensure universal accesss to basic but
effective services. Ensuring a healthy start to life for children; ensuring
good reproductive health for women; routine protection from
preventable diseases. But this has not happened in any countries. In fact
access by the poorest and most vulnerable has been getting less in many
countries. So to be really effective, universal access must be
complemented by very focused targeting of the poor - poor regions, poor
villages, poor households, poor individuals. That is a challenge to the
planning and organization of services.
A particular issue is to ensure that the health of household breadwinners
is protected. When the household producer falls ill the entire household
suffers. In fact, as is well known in Bangladesh, it is a major cause of
household poverty - not only due to the loss of income but also to sale of
household assets to pay for medical care. Consequently the health of the
entire household is threatened and the effectiveness of focused health
interventions such as child survival are themselves undermined. So
healthcare interventions and methods of healthcare financing - such as
health insurance - are important means of poverty prevention.
But health can contribute much more to overcoming poverty - beyond
the delivery of personal medical services. First is classic public health ensuring that poor people also share the benefits of safe water and
environmental protection, and improving the effectiveness of control of
major communicabel diseases such as TB and H1V/AIDS.
3 million deaths per year occur due to lack of access to safe water and
sanitation. In cities poor people may have to pay to private vendors up
to 40 times the cost of drinking water which the rich pay for the supplies
they receive through piped systems. There is new evidence emerging
which points to investment in water and waste disposal as very cost
effective methods for improving health. This is a subject which needs
fresh thinking.
Then there is the subject of intersectoral action for health. In the 1970s
and early 1980s it was considered obvious that other sectors such as
education had a major contribution to make to health - all as part of an
intersectoral approach to development. We need to return to this subject
- not just to consider how various sectors of government can combine
forces but also how government, NGOs and private enterprise can work
together to achieve health goals in the interests of reducing poverty.
A major point here is that the combined efforts of several interventions
may be more effective than interventions carried out in isolation.
Development research shows the importance of synergy and
complementarity. For example:
- by ensuring that children are healthy and that the school
environment is healthy,
learning is much more effective
- by ensuring that poor women stay healthy (as well as their
dependent childen) they are
less likely to default on their micro
credit loans
- by ensuring protection for workers from health hazards at the
workplace, household
income is also protected
Mr Chairman
Why is ti that we are making such a limited impact on povery and its
health consequences when there is convincing experience as well as
scientific evidence in favour of effective policies and action?
Part of the answer is complacency. It’s the modern thinking which says
“We donf need to worry about prevention because when I get it I’I just
take a pill.” Its a dangerous complacency and it is sometimes
encouraged by health professionals themselves.
Part o f the answer lies in a growing tendency for health profesionals to
see themselves first and foremost as scientists and technicians.
Sometimes we forget our roles as responsible and responsible citizens.
No one could know more about the realities of poverty than the doctor
and nurse who treat poor people day after day in their clinics and health
centres. We also see how poverty undercuts our ability to practice
effective medical care. So health professionals should have not only a
moral but also a professional interest in poverty reduction. Why, then,
do many of us continue to turn aside from poverty, claiming that it is a
purely economic phenomenon and none of our business? But this
attitude seems to be changing too. Later in our programme we will be
hearing an example from one country where the professions are deeply
involved in tackling poverty.
But the crux of the matter, Mr Chairman, is that too little effort has been
invested in creating sustained high level political commitment to health
as a central component of policies for reducing and preventing poverty.
We need the support of Presidents, Prime Ministers and Finance
Ministers to pull health into the mainstream of the development process.
A few months ago, on the occasion of the visit to Bangladesh by
Professor Amartya Sen, I was priviledged to hear the Honourable Prime
Minister speak of her commitment and that of her government to the
new focus of HPSP on meeting the health needs of the poorest in this
country. On Tuesday we will be honoured by the presence of the
Honourable Minister of Finance at our closing ceremony.
So I believe that we are meeting in very auspicious circumstances to
take forward the cause of the health needs of the poorest and most
vulnerable people in Bangladesh. What we achieve here will also be
important internationally. That is because poverty reduction and
health’s contribution to it are now of considerable interest in many parts
of the world.
I feel priviledged to be taking part in your discussions.
Thank you.
7
ESTABLISHMENT OF A NATIONAL NETWORK OF
POVERTY AND HEALTH IN BANGLADESH
Background paper for discussion at the workshop 11-13 April, Dhaka, Bangladesh'
Introduction:
1.
The need for increased collaboration in health development between organizations
and NGOs in Bangladesh has been clearly expressed in the discussions with NGOs
which preceded the workshop on " Meeting the Health Needs of the Poorest and Most
Vulnerable". As a result, one of the objectives of the workshop is to:
•
Create a sustainable partnership through a national health and poverty network,
to exchange experiences and share infromation on the most effective
approaches, strategies and actions for health improvement and poverty
reduction. This network will become part of the International Poverty and
Health Natwok that aims to influence policy and action to protect and improve
the health of the world's poorest people.
The forthcoming workshop in Dhaka will explore explore the content and
operationalization of the network.
The aim of this paper is to offer some practical ideas on the establishment of a
network. The first part of the paper gives a short background to the establishment of
the network; the second part develops the concept of networking and describes
conditions supportive to networking.
2.
Networking for Health
A network is generally referred to as a grouping or alliance of individuals,
organizations and agencies who work together, generally on a non-hierarchical basis,
towards a common goal or around a common concern.
While some networks are informal others may be more structured. Informal
networks are often based on personal contacts and are maintained through direct
communications between the members. They can work on an ad-hoc basis, for a
limited period of time on a specific issue such as nuclear testing in the Pacific, or they
can be permanent and work towards a more comprehensive programme such as the
improvement of womens' health. The success of an informal network will depend to
a large extent on the personal engagement of the members and on their willingness to
become involved in the network's issues of concern. An example of an informal
network is the NGO Forum for Health, a group which meets once a year to discuss
issues of common concern, or the International Poverty and Health Network which
'This paper draws on the following documents: V) Networkingfor Health, WJtO Europe, 1996
Conference Series Number 4, Copenhagen 2) Campaigning on Issues: How to build a
Network, from resource kit for consumer organizations produced by IOCU, the Hague, May
1991. 3) Regional Health Policy Development: Regions for Health network WHO/EURO
1993.
reunites people and institutions committed to the eradication of poverty and the
improvement of people's health .
A formal network may establish its own structure and agree on a clear mode of
operandum, although the degree of formalization may vary from those which develop
a constitution, criteria for membership and secretariat, to those agreeing on principles
of action and membership.
An example of a formal network is the Network of Community- Oriented
Educational Institutions for Health Sciences, an international network which aims to
strengthen and mutually support the members in curriculum development for
community health. Voluntary Health Organizations are in general also established on
a formal basis, regrouping individual member organizations and institutions in
common endeavours.
There seems to be a tendency for international and national networks to be more
formal and for local networks to be informal although both types of networks can be
found and serve a purpose at both levels.
3.
The rationale for a network
The main rationale for a network is that it can facilitate a process of mutual support
and collaboration between organizations with common concerns and shared values.
This in turn will help to create synergies through which organizations and groups can
harness their collective energies, promote dialogue and enable an exchange of
experiences and expertise.
Establishing a network is not an objective in itself. Its value lies in what it is able to
achieve in addition to what each member is doing individually. A network brings
added value when the issues are broader than initiatives of the members groups, when
the action could not be done by any one member alone, when no-one else will do it
and when joint action influences national policies. In developing its strategies and
activities, the goal of the network should be to draw on the specific expertise,
knowledge and experiences of each member.
4.
Building the network
The foundations for the network is created by identifying several principles which
should guide collaboration. Two very important conditions for the network are mutual
interest in the network and commitment to common principles.
However, in order to build on the foundation and create an effective network, it may
be helpful to identify elements which explain the relative success of 4 network. This
is easiest done by exploring some of the supportive conditions for networking which
have been described and experienced by other networks. These elements relate to the
goals, membership, the process of participation, and the coordination of the
network.
5.
Supportive conditions to networking
a)
Clear goals and objectives
To be effective, the network should develop well defined, clear, measurable goals.
The overriding ideas should be the outcome of a collective process and they should be
mutually agreed upon by the members.
b)
Motivation to work together
A network is bom from a common desire to work together. An important aspect of
collaboration is that the internal autonomy of the members is maintained and that this
is enriched by the choice to achieve something together. The ability of the network to
reach its goals will depend on whether or not it contains the relevant expertise. This
requires a basic knowledge of potential partners, their goals, objectives, areas of
activities and methods of working. This information will also reveal tools which can
be shared and contributions each member is willing/able to make. However, given
the diversity of contributions of the members, collaboration also requires a sense of
solidarity and an understanding of the different degrees of facilities and resources
which each partner has. This understanding will facilitate the creation of a framework
which will support and encourage participation and which allows for equal
involvement of all members at all levels.
Linked to the above is the openess to co-operate with other established networks.
Recognition of other networks working in similar areas of concern, will also help to
identify any gaps and/or the unique contributions which the network could make to
health development and poverty reduction in Bangladesh without causing overlap
and duplication.
c)
Clearly defined roles
In order to survive, a network needs a certain amount of co-ordination and clear role
for the co-ordinator/co-ordinating body. The very concept of networking calls for a
flat hierarchy which decentralizes control, resources and communication structures. In
this arrangement, there is no formal leadership structure and the role of the
coordinator(s) is to serve the needs of the partners, link like-minded and like-endowed
partners and when required by the partners, to act as the spokesperson of the network.
The leadership of the network should be prepared to share leadership with others and
to recognize and give credit to others for their leadership skills and their expertise in
specific areas of common concern. The expectations of the members on the leadership
as well as accountability of the leadership to the members should be defined and
agreed on collectively.
d)
Clear mechanisms of operation
If a network is to be effective, it is important that all members are clear about the
mechanisms of operation, in other words, the expectations of the network on each
member and the responsibility of the members towards the network. The degree of
formality of a network will depend in part on the objectives and goals of the network
but also on the resources, commitment and desire of the members to formalize or not
their collaboration. The members therefore need to decide on the operational
activities of the network, that is, the decision-making structure, including whether or
not the network should have a secretariat, a governing body (steering committee
/board/General Meeting), focal points, a legal basis (constitution) and specific criteria
for membership.
he worshop in Dhaka will help identify some of the overall goals and priority areas
for the network.
6.
Possible structure of a network
The structure of a network will depend on several elements such as the needs of the
members, financial resources, capacity of a member to take on the co-ordination and
so on. These and other elements therefore need to be discussed carefully by the
members.
:
An example of a structure which seems to be quite common among networks is
presented below.
Secretariat:
If a network is to function well, it is crucial that a secretariat be
established, either independently or through one of the member organizations. If a
member takes on the secretariat it must be prepared to dedicate the time needed for
the functioning of the network and to ensuring that contact is maintained among
members and groups. This may imply practical tasks such as establishing a data base
of members, corresponding with members on a regular basis, updating members of
new developments within the network, organizing regular meetings of the network
and taking responsibility for the follow-up of meetings.
Since networks do not have formal leadership, the co-ordinator should be prepared to
see his/her role as facilitator of the network, as a "sparkplug", igniting the energies of
others and willing to share leadership with others.
Member organizations: The member organizations should have a strong interest in the
work and development of the network and the relevant expertise to contribute towards
the objectives of the network. The members should promote the cause of the
network, maintaining contact with other groups who may be interested in joining the
network.
i
Decision-making:
The network will need to decide which decision-making
process best suits it's needs. For practical reasons, a general meeting of the network
may not be the most effective decision making body and a steering committee which
meets in between the general meetings may need to be nominated. Whether or not a
steering committee is needed, will depend on the extent to which the network decides
to undertake joint activities which require discussion, development, implementation
and monitoring. A steering committee may also be responsible for decisions relating
to membership, funding, marketing and communications.
QUESTIONNAIRE TO MEMBERS OF NETWORK
Participants to the workshop in Dhaka will be invited to look at practical ways of
goingforward to identify the way in which the above proposals could be implemented.
Please therefore consider the following questions and submit your responses as soon
as possible.
Name:
1)
What should be the overall vision of the National Poverty and Health
network, it aims and objectives?
What is the unique contribution such a network could make to health
development?
2)
Within which areas of health and poverty reduction should the network
focus on?
3)
What networks are you /your institution already part of? (Please also
add a short description of the type of network and activities developed by
the network and the mode of communication)
4)
How, and within which area of expertise could your institution contribute
to the network?
5)
How could the network contribute to the work of your
organization ? What areas of expertise/ collaboration /exchange
could your organization benefit from?
6)
What type of network would be most useful - informal/ formal? Please
give suggestions of a possible decision-making structure.
7)
What are some of the conditions for the effective maintenance of a
network? How is continuity ensured?
8)
What instruments are necessary for dissemination and coordination of
information?
9)
What should be the criteria of membership?
10)
How can the aims and activities of the network be promoted and given
visibility?
INFORMATION ON MEMBER INSTITUTIONS
TYPE OF MEMBERSHIP (please choose one):
Idividual:
Organizational:
N AME OF INSTITUTION:
CONTACT PERSON:
ADDRESS: (Including phone, fax and E-mail)
•4
WHAT ARE THE GOALS, OBJECTIVES, AREAS OF ACTIVITY AND
METHODS OF WORKING OF YOUR INSTITUTION?
WHAT TOOLS COULD YOU SHARE WITH THE NETWORK?
Go m
- 3-o.
Crisis in Governance of Public Health System
in Bangladesh:
A Challenge of Humane Governance
Abul Barkat, Ph.D.’'
Paper prepared for presentation at the Special Symposium on
Poverty and Health in South-Asia - Crisis and Challenge,
WHO-Health in Sustainable Development, International Poverty and
Health Network Advisory Group, Community Health Cell, Bangalore.
Hosted by Community Health Cell (CHC), Society for
Community Health Awareness, Research and Action
November 16, 1999, Bangalore, India
Professor, Department of Economics, University of Dhaka, Dhaka, Bangladesh, and Chief Advisor, Human
Development Research Centre (HDRC), Bangladesh
Acknowledgement
This paper is a modified version of an article by the author published in
1998 by the Centre for Policy Dialogue in 1998, The author sincerely
acknowledges many of his colleagues who have gone through the draft
manuscript and have suggested many useful changes. The author
especially acknowledges his research colleague, Mr. Muzammel Hoque,
for his valuable suggestions on the content of this paper.
Abbreviations
BCC: Behavioral Change Communication; CHC: Community Health Cell;
DFP: Directorate of Family Planning; DGHS: Directorate General of Health
Services; EOC: Emergency Obstetric Care; FFYP: Fifth Five Year Plan;
FP: Family Planning; FWA: Family Welfare Assistant; FWC: Family Welfare
Centre; FWV: Family Welfare Visit; GOB: Government of Bangladesh,
HPSP: Health and Population Sector Program (of Government of
Bangladesh);
IEC:
Information - education-communication;
IPHN:
International Poverty and Health Network (of WHO); IUD: Intrauterine
Devices; LB: Live Birth; LBW: Low Birth Weight; MA: Medical Assistant;
MCWC: Maternal and Child Welfare Centre; MIS: Management Information
System; MLGRD: Ministry of Local Government and Rural Development;
MR: Menstrual Regulation; NGO Non-government Organization; ORS:
Oral Rehydration Salt; PHC: Primary Health Care; PHS: Public Health
System; R&D : Research and Development; RD: Rural Dispensary; STD:
Sexually Transmitted Diseases, THC: Thana Health Complex; UHFWC:
Union Health and Family Welfare Centre; VAC: Vitamin A Capsule.
Crisis in Governance ol Public Health System - A Challenge of Humane Governance: A. Barkat
1
Public Health Governance: The Framework
The nature of crisis in governance of the public health system can be assessed from three
inextricably linked dimensions of humane governance: economic, political, and civic. Economic
governance consists of absolute and relative spending on public health reflected through extent
of priority assigned to public health goods, extent of compliance of allocation with the national
mortality and morbidity patterns, and equity considerations Political governance includes the
factors associated with the use of institutions by the government to govern, among which the
major ones are accountability and transparency, and compliance with rules and regulations. The
essence of civic governance is the right and responsibility of the governed quarters to
participate in and promote good governance of public health.
Viewed from these three
dimensions of governance, the paper attempts to show that the state of public health
governance in Bangladesh is unsatisfactory, and allout efforts are needed to transform this into
“humane governance”, which in turn is a major challenge ahead to ensure a high degree of
human development
Is There Any Public Health System' in Bangladesh!
Public health is an organized system of preventing disease, prolonging life span and promoting
health and efficiency. This is ensured through the sanitation of the environment, control of
communicable diseases, education of the individuals in personal hygiene, the organization of
medical and nursing services for early diagnosis and preventive treatment of diseases, and the
development of social machinery to ensure, for every individual, a standard of living adequate
for the maintenance of health to organizing these benefits so as to enable every citizen to
realize their inherent right to health and longevity.
Public health, in essence, is the
combination of scientific disciplines (e g. epidemiology, biostatistics, laboratory sciences, and
social sciences, and demography), and skills and strategies (e.g. epidemiological
investigations, planning and management, interventions, surveillance, and evaluation) that are
directed to the maintenance and improvement of the health of the people. Thus, in the
broader sense of the term, public health does not merely mean providing some services
through the institutions under the control of the Ministry of Health. On the contrary, public
health covers many other issues, e.g., ensuring hygienic quality of food and food items sold;
controlling emissions on the roads; supplying clean and safe drinking water to the community;
managing waste/garbage disposal; providing for a healthy environment in the work place,
shopping centers and/or in any other public places; and provision of housing and sanitation
facilities to the slum dwellers and squatter population, etc.
Bangladesh has accepted the goal of 1978 Alma-Ata Declaration and accepted the political
and social challenge to achieve this based on a primary health care strategy. Although
ensuring public health is a constitutional obligation, no national health policy as such has been
as yet formulated by the erstwhile governments. All past governments, officially, laid emphasis
on health sector development through adopting various programs in the national development
plan with the purpose of building a network of primary health care services. The official policy
statements (e.g., five year plans, perspective plan, etc.) have always emphasized
improvement in the health status of the common mass through reducing morbidity, modality
and poverty related diseases, success on which were never satisfactory. These are evident
from the following:
Crisis in Governance of Public Health System - /I Challenge of Humane Governance: A. Baikal
2
•
Sixty percent of the population do not have access to basic health care;
•
Over 40 percent of the total population is affected by Vitamin-A, iron and iodine deficiency:
•
Over 90 percent of the children are malnourished and about 660 children die everyday
from malnutrition:
•
Chronic child malnutrition stands at 42 percent in urban and 52 percent in rural areas;
•
Deaths of children under-5 still account for half of all deaths in Bangladesh; and the main
causes of such deaths are poverty-related infectious diseases;
•
Seventy percent of mothers suffer from nutritional deficiency;
•
Iron deficiency anemia among women alone causes losses in agricultural production to the
tune of US $ 5 billions over a period of 10 years;
• About 75 percent of the pregnant women do not receive antenatal care, and over 90
percent of them do not receive post-natal care.
These deplorable health scenario in Bangladesh is due mainly to the inefficient governance of
the sector resulting to inappropriate policies, rules, regulations, legislation and their inefficient
enforcement, non-responsive management, weak accountability, lack of transparency in the
sector, and lack of peoples’ participation in peoples’ health.
Viewed in context of the definitions presented above, the absence of well-organized structures
of public health in Bangladesh is apparent. Unfortunately, there is no well defined role for the
Health Ministry to intervene in important health related issues in the sectors controlled by other
ministries. Nor is there any meaningful coordination among the executive bodies, particularly
ministries, to monitor public health
As for example, factories are under the Ministry of
Industries and Commerce; and urban shopping centers or other public utility services are
under the control of respective municipalities overseen by the Ministry of Local Government
and Rural Development (MLGRD). On the other hand, black smoke, noise, public waste
precipitated on roads and other public places come under the common jurisdiction of the
Ministry of Transport and Communication and the Ministry of Environment; etc. Who is truly
responsible to safeguard public from public health hazards in these areas?
Public Health Governance: Salient Issues
After revealing and admitting the facts that the public health system does not exist at its self
pose yet. it can now be focused on how it is functioning within its limitation as a complete
system.
Analyses of official statistics presented in this subsection do not indicate a satisfactory
scenario in Bangladesh. The doctor-population, doctor-nurse, nurse-population ratios remain
far below the standard level. In terms of health infrastructure facilities, however, Bangladesh is
one of the well resouiced countries
Crisis in Governance ol Public Health System - A Challenge of Humane Governance: A. Barkat
3
Making allowances for the inadequacy of capacity in the health care system of Bangladesh.
governance relates to the efficacy with which the existing health care facilities and manpower
are utilized Our health indicators suggest that this could have been avoided in a better
governed system. Deaths of children under-5 still accounts for half of all deaths in Bangladesh.
Two-thirds of all morbidity cases originate otherwise from easily preventable diseases. Access
to and utilization of the three 'pillars' of safe motherhood (antenatal care, clean and safe
delivery, and essential obstetric care) remain wholly inadequate; and about one-third of all
households in Bangladesh have no toilet facilities at all. Rural households represent 82
percent of the population but account for only 65 percent of hospital visits. The patients from
the richest quintile are more than five times as likely to be admitted for inpatient-expensivecare than patients from the poorest quintile. Patients from urban areas are more than twice as
likely to be admitted than rural patients and male patients are more likely to be admitted than
females (HPSP, 1997). However, even within the urban areas, there is only 26 percent Vitamin
A coverage in the slums as compared to 49 percent in the rural areas, and measles coverage
is 61 percent as compared to 78 percent in the rural areas. Thus, in the urban slums, the infant
mortality rate is twice as high as that in the formal urban sector (For details, see: Barkat 1997).
These declining numbers suggest both a maldistribution of services as well as poor delivery of
such services rather than a lack of availability of resources. Misgovernance in the Public
Health System (PHS) thus point to an ineffective use of the resources at hand. The gaps
between the targets and achievements in major health indicators during 1990 to 1995, taking
1989-90 data as a benchmark, confirms this proposition.
To meet the overall objectives of the health sector, various programs were put in place in the
past. One major program in this direction relates to infrastructural development (Table 1). In
Bangladesh, at the grassroots union-level, one static service delivery facility is available for
20,000 population, one thana-level facility (Thana Health Complex') for 200,000 people, one
district-level facility (district hospital and MCWC) for 1.5 million population and one medical
college hospital is available to serve 9.3 million population. In addition to the public facilities, a
large number of NGO facilities and the facilities in the private sector cater to the needs of the
general public. A substantial gap exists between the availability of actual and officially
recommended services in those facilities.
As for example, the currently utilization of
institutional child delivery and emergency obstetric care (EOC) facilities in Bangladesh is far
below the recommended "minimum acceptable level" and the relevant EOC service facilities
are not evenly available across the administrative-geographic locations (Barkat. A, 1998a)
4
Crisis in Governance of Public Health System - A Challenge of Humane Governance: A. Barkat
Table 1:
Infrastructural Development in the Health Sector
Type of Infrastructural Establishment
Functional Activities
Population per
Facility
20,000
1
Union health and family welfare centres
(UHFWC) (4115):
Under FP
3,500
Under health:
1,230 (including rural
dispensaries)
Out patient services
2
Thana health complexes (THC) (374 in
number)
1.
2
3.
Bring health care to doorsteps of
rural people
Services in medicine, surgery,
gynae, dentistry
Supply of drugs and vaccines
200,000
3
Hospitals and clinics: 34,786 beds
Public sector:
27,544
Private sector.
7,242
Diagnostic and treatment facilities
1.5 million''1'
4
Medical education.
Medical colleges (13)
Dental colleges (4)
Doctor- population ratio= 1:41,870
Graduates 1200 (annually)
Graduates 60 (annually)
9.3 million11’
5.
Nursing education
38 Nurse training institutes
Nurse - population ratio=1:10,714
800 Nurse (annually)
6
Manpower deployment
Doctor-nurse ratio = 2:1
Source : Fifth Five Year Plan (FFYP), Barkat et.al 1997.
a> There are 64 district hospitals and 90 maternity and child welfare centers (50 of MCWCs are in the districts).
b> Estimate based on 13 medical college hospitals.
As to the resource allocation for public health care, a total of Tk. 10,600 million at 1989/90
prices was earmarked for the fourth five year plan period (Table 2). This constituted 3.05
percent of the development budget. Against this allocation, Tk.13,955.6 million at current
prices, i.e., Tk.12,103.5 million at 1989/90 prices was made available through different ADPs,
of which Tk.11,486 million at current price, i.e., Tk.9.970.50 million at 1989/90 prices, was
utilized showing a utilization rate of 82 percent.
Crisis in Governance of Public Health System- 4 Challenge of Humane Governance: A. Barkat
5
Table 2 :
Allocation to Health Sector Activities during 3rd, 4,h and 5th Plan Periods
Program Areas/Activities
Fifth Five
Year Plan
■ Fourth Five
Year Plan
Third Five
Year Plan
Allocation
(Taka in
million)
% of
Total
Allocation
(Taka in
million)
% of
Total
Allocation
(Taka in
million)
% of
Total
PHC and Ancillary
Services/Primary Level
2750.80
50.02
5671.90
53.16
34249.84
55.1
PHC Supportive
Programs/ Secondary
Level
1295.70
23.56
1179.70
11.06
6227.24
9.9
Health Manpower
Development
558.30
10.15
1154.00
10.81
9340.86
14.9
Hospitals & Clinics/Tertiary
Level, Drug, Equipment
804.30
14.62
2455.90
23.02
11831.76
19.0
Programs of General
Nature
90.90
1.65
208.50
1.95
622.72
0.9
5500.00
100.00
10670.00
100.00
62272.42
100
Total:
Source : GOB 1985, GOB 1995, GoB 1997, Haider et al. 1995
Although, the health sector is officially targeted to receive serious attention, an allocation of
3.05 percent of the development budget does not suggest a high prioritization of the sector.
Moreover, the utilization rate of 82 percent leads one to conclude that inefficient management
prevails in the health sector within this low allocation rate.
A comparison of allocations to the health sector in the past three five-year plans show primary
level health care received over 50 percent of the total allocation (Table 2). But an upward
trend prevailed in the allocations to the tertiary level, with a drastic down-cut at the secondary
level. Considering the fact that the relative benefits derived from the tertiary health services
are higher for the well-to-do segments of the society, it can be concluded that the allocative
priorities in the health sector tend to be biased towards the non-poor. In the context of
governance, this bias points to the skewed balance of political power in favour of the more
affluent segments of the population.
The skewed balance of political power in favour of the affluent (and against the poor) is
clearly evident from policy level non-compliance with human welfare-orientation
depicted in the pattern of public sector spending. Increasing military expenditure
reduces the speed of poverty reduction and social-welfare activities. This is because,
arms spending undermines human security, eating up precious resources that could
Crisis in Governance of Public Health System - A Challenge of Humane Governance: A. Barkat
6
have born ollioiwisn used for human rlovolopniont The lack of humane governance
hem is simply evident hom (he h,<;l that, dining the 1985-1996, the military expondiluie
in Bangladesh increased by about 52 percent - from US $ 341 million in 1985 to US $
517 million in 1996 (UNDP, 1998), whereas during the same period, the NATO military
expenditure fell by 25 percent. The lack of sensibility toward any humane governance
is evidenced in the pattern of scarce resource allocation where military expenditure
comprises at least 40 percent of the combined expenditure in public health and
education
Bangladesh has ordered 6 Mig-29 fighter aircrafts at a cost of US $ 120
million. This is simply enough to show irresponsiveness of governance in a country of
127 million population whereby 56 million are illiterate, 58 million people live below the
poverty line, 75 million have no access to primary health care, 50 percent of all deaths
constitute deaths of children under 5 years of age, annual death due to Tuberculosis is
100,000, and about 40,000 mothers die each year due to causes relating to pregnancy
and childbirth. The lack of humane governance is evident from the above purchase of 6
Mig-29 fighter aircrafts at a cost (US $ 120 million) that could have been otherwise used
for the total eradication of TB and leprosy from Bangladesh, or that could have been
used to drastically reduce the unacceptably high maternal mortality (from 4.33 to 2 0 per
1000 LB), or that could have been used to reduce the infant mortality rate to 50 per
1000 LB from the current level of 67, or that could have been used to deploy at-least
30,000 primary school teachers for 20 years, among others.
Though some success is claimed by the Government in health care, the public system could
reach only 70 percent of targets due to some inhibiting factors related to poor-governance
(detailed later on).
The Government measures its success in the health sector using a particular Management
Information System (MIS).
The officially proclaimed success stories are based on the
information obtained from this MIS.
However, a close analysis of this system reveals
loopholes and sufficient scope for under or over-reporting. As for example, multidimensional
gaps in reporting of pill use have been identified: at least one of every three officially reported
users of oral pills were non-users (i.e., official figures are overstated), 15.8 percent of non
users were reported as users of a brand; 28.9 percent of respondents were reported wrongly
as users of another brand, etc. (Barkat. et.al, 1994a). These facts definitely indicate a lack of
responsibility, accountability and proper monitoring - all of which are aspects of governance.
The Ministry of Health has a staff strength numbering 106,246 in the areas of health and family
planning (FP). This manpower structure has personnel with diverse skills, aptitudes and
commitments. Total governance of the public health system depends upon the smooth
administration of this manpower. The present organization and management system of these
directorates has not proved its worth both in terms of efficiency and effectiveness. Many
studies have revealed that conflicts, mistrust, and problem of communication, co-operation and
co-ordination etc. between the two wings (health and FP) create serious problems for
delivering health services to the people (Khuda, et al, 1994, Haider, et al 1995, Rahman 1996).
Studies reveal that the prevailing management culture lacks client focus, quality service and
cost efficiency. Deterioration in public accountability throughout the system is evident as the
supervision systems have all along been weak and ineffective. This perpetuation of a conflict-
Crisis in Governance of Public Health System - A Challenge of Humane Governance: A. Barkat
7
ridden organizational structure and weak management culture has led to an accumulation of
dissatisfaction among most of the employees. The major areas of their dissatisfaction, among
others, are related to the issues of staff promotion, salaries, other incentives, important
postings, preference for transfer, and higher training (Haider 1996). Dissatisfied employees in
a conflicting organizational structure and a mal-coordinated management culture clearly
indicate a weak capacity for governance.
The existing organization and management system is malfunctioning. So, it may be asked
how such an ineffective organizational structure had been adopted, why has been retained for
so long? Steps could have been taken to change both the organizational structure and
management culture. It has now probably become a difficult task to ensure any meaningful
change in the existing structure and culture. As the existing habits have become embedded in
the system, meaningful corrective action will need to be both bold and decisive.
The information-education-communication (IEC) program form an important component of
the public health program.
Radio and TV were intensively involved to strengthen
dissemination of health messages. A close analysis of the IEC efforts reveals that it has so far
served only narrow purposes of disseminating messages on ORS, iodine, sanitation and
family planning (FP). The IEC focus on clients' rights and providers' responsibilities have been
inadequate. In order to ensure that IEC is 'for the people', it should have been designed
accordingly The basic strategy of IEC should have been designed in such a way as to take
care of the two basic proximate determinants of human development: enhanced health
awareness and knowledge, and increased utilization of services.
Most of the people in the country unfortunately do not know the nature and extent of health
services on offer by the public health sector. Nor do they know enough about how to avail of
such facilities. How many people know that there are eleven formal steps for admission to a
hospital? How many public sector health facilities publicise their service availability by time,
person and cost? Actually, the situation is such that most people never feel that good health is
a fundamental right and having accesses to health services is their constitutional right. They
perceive the services offered by the public health system to be part of the grace and favour of
the Government, and thus always feel indebted to the medical personnel who provide these
services. The feudal or bureaucratic attitude of the government health personnel also
contribute a great deal to feed such public perceptions.
The general public, including the more educated and conscious people, except some
professionals, tend to remain in dark about their health rights. Ten health rights which vest
with the people of Bangladesh, as for people elsewhere in the world, include the right to
information, access, choice, safety, privacy, confidentiality, dignity, comfort, continuity, and
opinion. The failure to recognise the rights of the citizens to basic health care has rendered the
public health system in Bangladesh into a largely supply-driven process. The system remains
producer-oriented instead of becoming user/customer oriented which is counter-productive to
the principle of bringing health care to the people. The people are not asked what they need,
whether they feel comfortable with the services or what their preferences are in consuming
health services. Absence of a client-oriented IEC strategy is a measure of poor governance in
the PHS.
Crisis in Governance of Public Health System - A Challenge of Humane Governance: A. Barkat
8
Factors Influencing the Crisis in Governance
Notwithstanding some developments in health status, Bangladesh's health care system
remains below its promise leaving the country's health status in the lower echelons of the Third
World human development indicators. In order to identify the macro-level problems of public
health governance, it would thus be useful to analyze the reasons behind the significant
disassociation between the health targets and achievements. Most of the health indicators
show low rates of achievement. As for example, the population covered under the essential
health care, delivery assisted by trained persons, antenatal care, diarrhoea control, TB control,
and control of goitre show highly depressing outcomes. How to explain the low achievement
of the 4th plan (in 1995) not only compared to the targets set in the plan but also lower figures
compared to the benchmark of 1989/90 in terms of the following indicators: population
coverage under essential health care, immunization of under 1 child, delivery assisted by
trained persons, antenatal care services, control of diarrhoea and number of medical
assistants. The state of responsiveness of governance can be understood easily if one relates
these coverage indicators to the health status of the population in relation to infant, child and
maternal morbidity as well as mortality, and therefore with life expectancy-the most important
indicator of human development.
Over-targeting is a common characteristic of our health sector plan. As shown in Table 3, it
was evident in the fourth plan and this is also true as for the fifth plan. How are we going to
bring down the under-5 mortality rate from a high of 133/1000 to 55/1000 LBs? How are we
going to expand population coverage under essential health care from a low of 45 percent to
70 percent? Is it possible to attain the 80 percent rate for deliveries assisted by trained
personnel as well as for antenatal check ups—all by the year 2002? These shortfalls should be
treated as a manifestation of failure in governance.
9
Crisis in Governance of Public Health System - A Challenge of Humane Governance: A. Barkat
Table 3:
Major Health Indicators: Targets and Achievements During Fourth Five Year
Plan (1990-95), and Targets for the Fifth Five Year Plan (1997-2002)
Health Indicator
Unit
Bench
mark
(1989/90)
Fourth Five Year Plan
(1 990-1995)
I
Fifth Five Year 1
Plan (1997-2002):
Target
Target Achievements
7
Crude death rate
/1000 population
13.9
12
8.5
Infant mortality rate
/1000 live birth
110
80
78
55
Neo-natal mortality
rate
/1000 live birth
-
-
46
30
Under-five (U5)
mortality rate
/1000 live birth
110
90
133
55
Maternal mortality
ratio
/1000 live birth
7
4.5
4.5
3.0
Life expectancy at
■birth
Years at birth
53
55
58
60.0 (male)
59.0 (female)
Population covered
under essential
health care
% of population
50
80
45
70
: Immunization
(under 1 yr.)
% coverage (all)
75
85
66
85
Delivery assisted by
trained persons:
% of preg.
women
20
50
12
80
Antenatal care
% of preg.
women
45
60
35
80
Control of diarrhoea
% of use of ORS
90
90
66
90
Control of TB
% of cases
found (sputum
positive)
20
50
30
100
Av. intake (Kcal)
% Malnutrition
Stunting
Wasting
% of new born
<2500g
1850
2100
1950
2300
>45.7
7.0
<40
Nutritional status:
Energy intake
Under-5 malnutrition
.Prevalence of LBW
;
;
1
15
I
,
__________________
_______
I
10
Crisis in Governance of Public Health System - Zt Challenge of Humane Governance: A. Barkat
Health Indicator
Unit
Bench
mark
(1989/90)
Fourth Five Year Plan
(1990-1995)
Fifth Five Year
Plan (1997-2002):
Target
Target Achievements
Prevention of night
blindness
% of <6 children
receiving VAC
Control of Goitre
% covered
through Lipoidal
Iodized Salt
66
90
85
90
10
100
40
100
’ 'I
C
10.0
Prevalence of
disability
/1000 population
Prevalence of
leprosy
/1000 population
(Prevalence of
/1000 population
0.5
Prevalence of polio
/1000 population
0.01
Prevalence of
tetanus
Z1000 population
0 05
Prevalence of TB
/1000 population
0.05
. Hospital beds
Cumulative
0.24
0.05
i measles
34488
36000
34786
42000
Health services
24501
26000
27544
29000
Other ministries &
.privates
9987
10000
7242
13000
J
it
: Thana health
complex
One in each
thana
351
397
374
397
.UHFWC/RD
One in each
union
3375
4325
4038
4400
J
!l
Lab, diagnostic
services:
i Simple lab. facilities
% coverage
iat THC
1
Simple lab facilities at % coverage
distiict
I
100
100
90
100
100
100
100
100
11
Crisis in Governance of Public Health System - A Challenge of Humane Governance: A. Barkat
The failure to attain planned targets, as indicated above, do not originate in a failure of
planning because public resources were, indeed, allocated so as to attain the targets set in the
FYP. In reality, these shortfalls reflect failures of governance, Some of the major elements of
such governance factors are mentioned below:
1
Absence of management co-ordination resulting to absence of an accountable
and responsible health care system.
These originate from failures of
governance in putting in place and enforcing a system of accountability in the
health system
2.
Quality of health care, both domiciliary and institutional, presents a dismal
picture. Factors identifiable for the emergence of such a situation can be
attributed to labour turnover (absenteeism); rampant spread of private practice
by public sector physicians; inadequate supervision over supplies of drugs and
medicines; poor administration in hospitals and clinics; poor quality of drug
production and laboratory services; inadequate maintenance of equipment and
health facilities; misuse, wastage, and under-utilization of manpower.
3.
Organizational inefficiency arising from lack of co-ordination
directorates of the Health System (DGHS and DFP).
4.
Poor inter-project linkages and poor institutional co-ordination. The Government
retains responsibility to structure the form of linkages and co-ordination and to
monitor their activities.
5.
Ineffective referral system resulting to a low performance record in the health
sector In reality, there are no functioning referral and follow-up systems in the
public health system in Bangladesh, which constitute the weakest linkages in
the whole service delivery system.
6.
The MIS could not be modernized and linked to the peripheral health care
systems. Sub-systems of the MIS for laboratory services, school health,
industrial health, and indigenous and homeopathic medicines were also not
developed.
7.
The schedule for the completion of different projects proved to be lax and
usually fell well behind its set targets.
8.
Short tenure (as a result of retirement, overseas study, transfer) of health
personnel in any particular post in the PHS.
of the
two
The management of the tertiary health care centers -- the district hospitals, medical college
hospitals and referral hospitals is a major issue in public health governance. The problems in
this area are. in fact, more severe due to the size of the institutions which also face problems
unique to the culture of larger institutions. Abuse of trade unionism by Class III and IV
employees is an instant example of the extra dimension added to the problems already
discussed above. Services in these hospitals are out of reach of the poor people and avoided
Crisis in Governance of Public Health System - A Challenge of Humane Governance: A. Barkat
12
by the rich due to the poor quality of services. The hospitals are still full of patients all the time,
particularly from the middle class and lower middle class people who can somehow establish a
linkage with the power structure to obtain a bed in such hospitals. Poor people at times get
some outdoor services, but these are provided so casually and carelessly that such services
remain hardly commensurate with the facilities and skills in other such hospital. Maltreatment
of these poor outdoor patients by the medical staff poses issues of moral hazard where
patients are treated without compassion as if the patients were beggars obtaining favours from
the PHS. Doctors in these hospitals appear helpless to control the misbehavior of the service
staff of the hospitals
The Class III and IV employees in every district level and medical college hospitals (also
specialized hospitals) in a very organized manner, under the banner of their trade unions,
contribute to misgovernance of the hospitals. They build homesteads in open spaces within
the hospital campus where they themselves reside and also rent space to the outsiders. These
open spaces, designed during the planning of hospital premises in order to keep open spaces
to ensure hygienic environment in the hospitals are degenerating into slums. The whole
environment of the hospital has become unhygienic both physically and socially. These
protected slum-like enclaves have become a safe haven for criminals. This is a very common
picture in most of the medical college hospitals and district hospitals. Anyone visiting the
Dhaka Medical College Hospital Emergency premises and surroundings, will observe such
facts. Neither the municipalities nor the Health Ministry have thus, taken any appropriate action
against these unauthorized occupants. This reflect a problem of co-ordination between
different executive bodies of the government. Municipalities are not allowed to intrude into the
hospital premises. The Ministry of Health also remains quiet and probably expects the
MLGRD. municipalities or the Home Ministry to take the initiative to clean up their hospital
premises.
Why have the hospital authorities lost control over their employees? The problems appear to
originate in the politicized administrative structure which lies at the root of our misgovernance.
This illegal occupancy also reflects governance failure both in the health care and municipal
system to provide adequate housing to lower level public employees.
The unhygienic environment of all these hospitals is not limited to its slums. Hygenie in the
bathrooms, beds, operation theatres etc., and the entire premises in a ward, remains at levels
unacceptable for a modern hospital This lack of hygiene originates in the negligence of duties
of the concerned employees. Due to the poor bed-population ratio, the hospitals are already
over- burdened with patients doubling in beds, or arranging temporary beds in the veranda,
aisles etc. to make the overall physical environment crowded, unmanageable and dirty. In
addition, negligence to keep the hospital premises clean, really makes the total situation
unbearable. As a result, the quality of health care and services is in a state of free fall. The
overall picture is so depressing that even tiie sweepers complain of the want of necessary
logistics for enabling them to do their job. Why do sweepers not have adequate facilities to do
their job in spite of financial provisions to procure supplies?
Food supply to the patients is another area of mismanagement and misuse of resources.
Kitchens are as unhygienic as those of common roadside hotels. Both quality and quantity of
food are inadequate to the needs of the sick. Patients always complain against the nutritional
contents and palatability of the food served to them. Doctors claim that they are not in charge
Crisis in Governance of Public Health System - A Challenge of Humane Governance: A. Barkat
13
of food supplies. In turn, the food management staff claim that they supply only what they get.
Patients have no one to whom they may complain about their diet. At every stage, from
obtaining the contract for food supply to the final feeding of the patient, there is evidence of
financial malfeasance which is widely evident However, nobody is held responsible to stop
such malpractice.
A similar state of misgovernance prevails in the supply of medicines. Patients rarely obtain
medicines from the hospitals whereas the allocations in the budgets do not reflect such crises
of resources to procure medicines for the hospitals. Doctors avoid any responsibility for this
state of affairs arguing that the medicine supply department is not under their authority.
Personnel in the supply section blame the doctors for putting them in troubles by prescribing
the out-of-stock medicines for their patients, while the doctors claim that the medicines were
supposed to be in the stock of the hospital. Accounts of medicines stock are never checked by
the doctors. Nor does there appears to be any scientific system of maintaining an inventory of
medicine in any public hospital. In fact, among all the supplies in the hospital, medicine
appears to be the most liable to malfeasance because of its portability, durability and
marketability. Many pharmaceutical shop owners admit that they buy their medicines from the
hospital personnel at cheaper prices than an offer in the market. Many private clinic owners
admit that they procure expensive equipment and supplies from the public sector supply
system. How do these medicines and equipment move on to the market? Why like many
other open secrets is this anomaly not checked or controlled? It appears that everybody from
the top to the bottom knows everything, but nobody takes action.
Doctors in the hospitals are so busy that it is very difficult to make an appointment with them
even in case of an emergency. A study conducted by UNICEF (1992) showed that our doctors
spend 54 seconds per patient at the thana hospitals and rural dispensaries; they take 37
seconds per patient to dispense medicines. It is true that the qualified doctors perform their
best in the hospitals, but not in those where they are appointed. They are more inclined to
moonlight in private clinics where government doctors maintain a dual obligation with their
official responsibilities.
Payment of unofficial fees in these hospitals are very common. While official fees are minimal,
the patients are paying out substantial sums as unofficial fees, in the form of bribes and
payments to staff to ensure that they receive the services they are technically eligible to
receive free of cost. These may be five to ten times the official fees paid, and are (unlike
official fees) paid in significant amounts by all income groups. In some cases, these fees are
understandable given a shortage of resources where patients may be compelled to purchase
supplies and drugs for their own treatment. Other fees are typically paid to ayahs, nurses and
other hospital ward staff in order to ensure a bed or more attention (Hossain et al., 1996).
The payment of unofficial fees to hospital staff, particularly Class III and IV employees, is
somewhat different. It again partly reflects inadequate government resources invested in
offering low rates of employee compensation, but it also reflects a culture of excessive rent
seeking. Many of these positions in public hospitals are financially lucrative because of the
potential to levy fees from patients, and these jobs are, not surprisingly, much in demand.
Entry into these positions is, in fact, not open; and the jobs are usually handed down within
families or given through bribes, etc. If this problem was merely one of staff compensation for
inadequate salaries, then it could be regarded as having no net welfare impact; but when it
Crisis in Governance of Public Health System - A Challenge of Humane Governance: A. Barkat
14
involves earning of excess rents by hospital employees through their privileged position, it
cannot be justified. More effective control of these practices would reduce the burden on
patients. However, this would require that policy makers be willing to confront hospital staff
over such long-accepted rent-seeking practices; and this may not be politically feasible, if
government policy-makers are more concerned about the political power of the staff than the
care of ordinary patients (Eliya. R.P, 1997).
The nature of involvement of the private sector in providing health care is a major governance
issue. At present, the government's contribution to the health sector is about 35 percent while
the remaining provisions come from the private sector and individual households. In terms of
governance of the private sector, the following three issues deserve special consideration:
1.
At present, private health care facilities are mostly managed by public sector
professionals Some public sector professionals even use public sector facilities
for private business. Private sector investment principally went into the
establishment of institutions and laboratories.
2.
Public sector policy to establish and promote the private sector remains
inadequate, which drives many patients to go to neighboring countries for
treatment of easily manageable diseases. Every year, at least US $60 million is
being spent by the people who seek better treatment in cities such as Calcutta,
Madras, Delhi, Bangkok, Singapore, etc. (Rahman 1996).
3.
Public sector policy to ensure standards and quality health services at the
private sectors is not enforced.
The governance of other existing healing services/traditional health services outside the
hospitals is one of the most crucial issues because of the extensive use of these services.
Apart from the government-provided medical health services, private medical (and non
medical) services are widely available in Bangladesh. Private MBBS (or upper degree)
practitioners (popularly known as Allopathy'), Homeopath practitioners, Ayurved (Herbal)
practitioners (popularly known as kabiraj), paramedics or less than paramedics (mostly termed
as quacks) are extensively available both in the urban and rural areas of Bangladesh.
Qualified (MBBS and upper) allopaths are however, rarely available in the rural areas. In
modern times, Homeopathy and Ayurvedi have obtained official recognition as part of the
medical system of India, China and in some western countries. The Government of
Bangladesh has also recognized these two systems and has established examination boards
to award degrees under these medical systems.
But, very few homeopaths and kabiraj may be deemed to be qualified from the recognized
colleges of their discipline. Most of these traditional practitioners are practicing without having
any formal registration. These half educated doctors practice in their respective localities.
People have easy access to them, and their services are less costly. On the other hand, due
to the procedural and bureaucratic complications and poor quality but high financial costs of
services people are reluctant to avail of the government health services. So, these half
educated or non-educated doctors have a ready flow of patients inspite of their questionable
diagnosis and treatment which may complicate the medical problems of their clients. This
weak quality of service also applies to paramedics. Many of these paramedics may have
Crisis in Governance of Public Health System - A Challenge of Humane Governance: A. Barkat
15
requisite qualifications to deal with certain common diseases, but many others claim to be
paramedics without having any qualifications and just converting themselves into paramedics
in addition to their role as compounders or salesmen in a pharmaceutical shop.
In addition to these medical services, non-medical forms of healing are also practiced widely in
Bangladesh. These healers are known as spiritual healers, termed as ojha, khonker, goonin,
pirbaba etc. To the astonishment of modem science and modern urban culture, this non
medical system is widely practiced in the big cities also, including the cosmopolitan capital city
Dhaka. On the top of all, these practitioners particularly homeo, ayurved and spiritual publish
very catchy advertisements in the well established daily newspapers of the country. These
advertisements are mostly misleading and unethical even from the viewpoint of marketing
ethics.
All these informal private institutions and individuals providing medical and non-medical
services are not subject to any public regulation. Nobody is there to check the boundary of
work of the paramedics, to check the arbitrary homeo and ayurved practitioners or to
investigate the non-medical services used for healing or cheating people.
Neither the Commerce ministry, nor the Information ministry, nor the Health ministry appear to
be taking any action against these unlicenced purveyors of medical services. Thus, ordinary
people, when feeling cheated, simply blame themselves and feel absolutely helpless finding
no place to file their complaints. Such a pervasive malpractice remains absolutely beyond the
reach of the PHS or indeed of the law enforcement agencies. This official oversight of private
malpractice in the area of health care is further evidence of sufficiently weak governance of
Bangladesh.
Low Usage of Public Health Facilities: A Reflection of Crisis
Official regulation of non-official health care is of some importance since more than three-fifths
(60%) of the population in Bangladesh have no access to the public health facilities. Only
about 15 percent of visits for medical treatment are to a government clinic (Stalker 1995).
Those who have access to such public services are not obtaining good quality services As
discussed at the very outset good governance in the PHS accelerates increased utilization of
health services by the community and reduces public exposure to induce malpractice.
Improving the PHS thus has wider ramifications than the public system. It would, thus, be
worthwhile to investigate the reasons as to why people do not use/rarely use government
health care facilities. Some of the reasons identified in the literature include:
1.
Non-professional behavior of the providers, non-availability of doctors and other
staff, and shortage of drugs at the facility (HPSP, Task Force 8).
2.
The villagers know that the government health services provided at THCs and
FWCs are free, but poor people are usually bound to give illegal payments at all
levels (without receipt) charged by the staff. As these are illegal charges, there is
no fixed rate.
Crisis in Governance of Public Health System - XI Challenge of Humane Governance: A. Barkat_
16
3.
As the hidden costs of government health care services are high, most of the poor
people are unable to afford it. Therefore, instead of going to the THC, they go to
quacks, kabiraj. homeopath and spiritual healers, whose services are cheaper and
sometimes payment system is transparent and it can also be deferred, if necessary.
4.
The majority of villagers, particularly poor women, are illiterate.
They lack
knowledge about health and hygiene. Most of them are unaware of the services
available at the health center.
5.
Provider's care for the patient depends on the bribe given to them. If the patient
gets a ticket for Tk.2 (as per rule), staff usually do not pay any attention to him/her.
The doctor just prescribes two tablets, mostly, paracetamol, which is available at
the government health facilities. For proper treatment the doctors suggest the
patients receive treatments from them privately by paying their usual fees (Tk.30-50
in the rural, and Tk. 100-200 in the urban areas).
6.
Doctors usually prescribe more medicines and lab-tests than necessary and tell the
patients to buy medicine and do lab-tests from specified pharmacies and diagnostic
centres respectively. There is every possibility that a commission system prevails
among the concerned doctors and the pharmacies and diagnostic centres.
7.
Though Menstrual Regulation (MR) services are free, some providers charge a
certain amount (Taka 200-300) for this service. Non compliance of this payment
results in unintended pregnancies/unwanted births. There exists evidence that the
amount of money charged for the purpose is directly proportional to the months of
pregnancy at the time termination is sought (Tk.100 for each month of pregnancy).
8.
The Satellite Clinics are supposed to provide some PHC medicine, but usually very
little of this is distributed. Although the government facilities have a variety of
medicines, in many instances, the doctors distribute the same medicines to all
patients. Studies have shown that the doctors prescribe the same medicine to the
poor for all diseases. The villagers realize that the official doctors are negligent in
their treatment, particularly of the poor and thus tend to seek private treatments.
mostly from non-qualified personnel.
9.
There exists a relationship between the behavior of the health care providers and
the socio-economic status of the patients. A study shows that doctors offer the rich
and influential patients chairs to sit on but talk to the poor people with disrespect.
They write down prescriptions for the poor women and tell them to buy the
prescribed medicines from outside pharmacies. The THC staff usually pay more
attention to the rich and influential people and give them free treatment, which
discourages the poor to come to the THC.
10.
The concept of "cleanliness" (asepsis) is a misnomer in health and usually
misinterpreted by the service providers. Usually, the doctors do not wash their
hands before dealing with a patient, and/or between two patients, but they do wash
Crisis in Governance of Public Health System - A Challenge of Humane Governance: A. Barkat
17
their hands only for "themselves” before leaving for home (non-compliance with
minimum aseptic measures).
11.
Location is an important factor determining the utilization of the health care centers.
In many instances, site selection is a function of political pressure.
12.
There are some social and cultural factors. As there is a shortage of female
doctors, the male members do not like to take the female members of the family to
male doctors, using purdah (female seclusion) as an excuse. This is especially true
for adolescent girls' non-visit to health facilities.
13.
The village men having sexually transmitted diseases (STDs) are averse to going to
the government health care facilities as there is no privacy in these places. Also
the doctors' attitude towards patients having STD is non-professional, and this can
be a major reason for them to go to Kabiraj (herb specialist) for treatment of STDs.
14.
There is hardly any clean waiting room and toilets in the government health care
facilities. Generally, there is a lack of sitting arrangements in the health facilities
15.
The HAs, FVWs, FWAs and other health workers lack the required training in some
major areas. As they lack training, sometimes, they cannot detect risk pregnancies.
As a result some pregnancies end up with complications, miscarriages, still births
and eventually villagers lose faith in them.
16.
FWCs are the closest health facilities for the village people. Though there are
residential arrangements for the FWVs and MAs in the FWCs, they do not stay in
those premises. Many FWCs remain closed most of the time.
17.
Though about 4 to 7 doctors are posted in the THC, and there are residential
facilities for them, some do not stay in the thana. They commute from the nearest
city, and come once or twice a week and sometimes once or twice a month. Also.
there exist a system of "relay presence" which occurs within the full knowledge of
the district authority.
18.
In many district hospitals, some posts remain vacant most of the times, e.g., the
post of dental surgeon. In some district hospitals where dentists are posted there
are no dental chairs.
19.
The discontinuation and drop-out rates of family planning acceptors is significantly
high. Most of the discontinuers of IUD and injectable discontinue due to side
effects. About one-third of the current users of family planning report health
problems with their methods and the rate is higher for most clinical methods.
Service providers are non-responsive to treat these users.
All these malpractices by the health personnel are widely prevalent in almost all of the primary,
secondary, and tertiary health care centers and appear to have persisted for a long time
without any evidence of action taken by successive governments to solve these problems?
Earlier experience reveals that past attempts to improve the governance of the PHS have
Crisis in Governance of Public Health System - XI Challenge of Humane Governance: A. Barkat
18
proven to be infractuous. Many evaluation reports have addressed these issues of governance
failure, but such reports have failed to arrest the deterioration in the governance of the PHS.
Thus, the weaknesses in governance have become perpetuate and may even be moving to
the point of irreversibility.
Aid Dependence and Crisis
External donors are involved in the health sector, and obviously play an important role in public
health governance.
Donor support includes technical assistance, commodity assistance
including provision of equipment, contraceptives and DDS kits, and other project aid (salaries.
construction).
Donors' participation in the program is initiated at the stage of planning,
programming and in certain cases in the implementation, monitoring and evaluation phases.
Analyses of the donor supported programs and projects permit one to raise various issues
relevant to the governance of health sector. The pertinent questions are:
1.
Is our health program donor driven (?)
2.
Is our program priorities determined by the national government (?)
3
Who decides on the allocations (?)
4.
Is the parliament empowered enough to decide its own health sector priorities
based on informed judgement (?)
5.
Is it not a wastage of time of our service providers to respond to the various
requests for information from a variety of donors?
6.
There appears to be a lack of coordination among the donors. Cannot the
Government of Bangladesh develop its own health agenda and subordinate donor
resources to a realisation of this agenda?
Challenge of Humane Governance: What Needs to be Done?
Inspite of some relative achievements in health sector over the last two decades, much
remains to be done. Although infant mortality, maternal mortality rates have declined they still
remain at a very high level. The quality of life of the general people is still low. Low calorie
intake still continues to result in widespread malnutrition. Poverty related diseases still take a
huge toll in lives. Diarrhoeal diseases are still the major causes of morbidity; over 65 percent of
all morbidity cases in 1996 were caused by communicable and poverty related diseases;
annually about 100,000 people still die due to tuberculosis. The coverage of total population
under primary health care is still low compared to many developing countries.
A comprehensive National Health Policy has to be formulated with a view to provide strategic
directives to health care and the design of mechanisms for attaining the vision through proper
utilization of resources invested in health care.
Crisis in Governance of Public Health System - 4 Challenge of Humane Governance: A. Barkat
19
Planning process needs to be strengthened so that realistic and affordable targets can be
supported by effective and viable strategies. I he formulation and completion of a realistic propeople Health Plan would be a majoi step towards a more efficient planning process and the
realization of GOB's goals in the health sector. It is important to make pro-poor, pro-children
and gender sensitivity analyses of the strategies contained in such plans.
Appropriate administrative structures need to be installed and implemented keeping in mind
the following:
1.
No arbitrariness in application of rules and laws should be encouraged.
Transparent demarcation of responsibilities, liabilities, accountability, answerability
must prevail. Chain of authority must be established, and focus must be given to
efficiency, and effectiveness of the programs.
2.
Involvement of the community in local level planning and faster implementation of
health programs and community oversight of the provision of health services will be
conducive to improving the governance of the programs. In this way, accountability
and transparency in provision of public health services will be strengthened and
public confidence in the system will improve. This will divert users away from nonformal providers of health care back into the PHS.
3.
Positive control over wastage and irregularities at different tiers should
be
emphasised. Irregularities in administering health regulations and in providing
services may arise due to low remuneration packages, weak incentive system,
ineffective hierarchical supervision and inadequate public vigilance. Improved
monitoring of supply and demand for services has to be devised and introduced
within a system of community and user participation.
4
A more responsive governing system for the PHC, by levels, is likely to provide
better management outcomes
Enactment of appropriate legislation for health
protection and effective enforcement of such legislation is urgent.
The public health system of Bangladesh demonstrates some striking contrasts. On one hand,
we have a health system so seriously flawed in organization, management and operation that
it fails to help people in desperate need. On the other hand, we have in place a series of
specific programs which have served as models for the rest of the world. In terms of quality,
the public sector health services tend to be substandard at all levels. The problems are partly
organizational, but the major problems concern personnel - their organization, their skills, and
above all their motivation and commitment. Many of the appointments to the PHS are based
less on qualifications than patronage. Weak accountability has its roots in an organized
system of tadbir which means "influence peddling". This is most rampant with respect to
decisions on posting and transfer. It may be mentioned that the Discipline and Appeal Rules
1985 has been blocked in many cases where relations of the high and mighty are involved All
these practices create, promote and perpetuate wastage in the PHS. It is obvious, because
when quality is sacrificed at the time of recruitment, the system is burdened with wasteful
habits and concomitant inefficiency from the very beginning. This process perpetuates the
lack of accountability in the whole health system. The greatest opportunity in the health system
lies not so much in provision of more resources, more workers, or more training (though all
Crisis in Governance of Public Health System - A Challenge of Humane Governance: A. Barkat
20
would be welcome), but in making the existing system work more effectively. A better
functioning of the public health system is more likely to be provided and sustained by putting
more power in the hands of patients so that they are empowered to demand from the health
practitioners the scivices they deserve.
There are several grey areas which create impediments to the achievements of health goals.
There must be specific operational assessment procedures for assessing work efficiency.
There should not be any duplication of responsibilities or tasks. This spoils the accountability
and transparency in performance.
Quality control must be institutionalized to improve
services, smooth functioning, and fulfillment of goals. All sorts of malpractice should be
severely dealt with. One serious malpractice is unofficial fees in GOB facilities in the form of
bribes and payments to staff to ensure that patients receive the services which they deserve
free of charges. In some cases these fees are for supplies of drugs and beds.
Staff turnover and absenteeism adversely impedes the pace of progress in achieving health
goals. This again refers to lack of accountability. Thus, appropriate mechanisms need to be
developed to ensure effective control over these issues to maximize output.
Serious attention to tackle "zero elements", viz, absence of doctors even after posting, non
availability of materials even after supply, useless preservation of equipment, tendency of
service providers not to serve as per the set norms etc., are necessary
Low quality of care and services is a major feature of our health services. The negative
consequences of poor quality services, as already evident from Bangladesh experience fall on
both patients and the service delivery system in different ways: poor quality at the primary level
service delivery facilities motivates patient to by-pass the referral system which has immense
consequences for the efficacy of the health delivery system; poor quality services result in
adverse health outcomes for the patients as well as gives a bad name for providers; poor
quality staff and training result in mis-diagnosis and medical complications; low quality
information in the outreach system contributes to less knowledgeable clients as well as
discontinuities in the use of services; and finally lack of "humane touch" in providing services
destroys the image of the whole sector.
In addition to the moral and ethical arguments, there is also an issue of sustainability in the
delivery of high quality services. Quality health services generate demand for services; it
brings clients back, and can even reduce per client cost. Improvement in quality in providing
health services can have an important impact on efficiency, patient's satisfaction, and
utilization rate and can be self-financing. Because, for the patient - good quality of service
leads to increased value for money, increased demand, and increased willingness to pay - the
outcome is increased revenue; for the service provider -- improved quality presents him with
increased opportunities to improve efficiency, cost containment, and client satisfaction and
compliance with treatment protocols - the outcome is lower cost. Together these two forces
combine to increase net revenues.
The question of disguised private sector needs to be dealt with all seriousness. A substantial
proportion of the current private sector involvement in health is staffed by public sector
employees. Most of the facilities of the private sector also come from the public sector. Since
there is no strict control over such practices, public health service is enormously impaired
Crisis in Governance of Public Health System - A Challenge of Humane Governance: A. Barkat
21
Thus, there is a need for devising ways and means of combating such a trend.
involvement and civic governance are necessary to resolve the issue.
Community
Accessibility to services should be viewed as one of the major governance issues. Outreach
areas in remote zones should receive serious attention. Keeping in mind the rural-urban
migration process, health facilities in urban areas should be framed accordingly. Urban slum
dwellers' access to public health care system needs to be radically improved. Increased
coverage and access in terms of areas and types of health problems should include adoption
of community-based measures with community participation.
Health service centers, ambulances, doctors, nurses, material supplies etc. merit urgent
attention. To combat shortages in supplies of drugs, medicines, center facilities, it is
necessary to develop bio-medical research facilities, support local production, extend
infrastructural facilities for production, encourage private sector involvement.
Generating people's awareness and vigilance about health, health services and facilities
should form an important ingredient in governing public health. The IEC should be based on
the premise that it will empower people in terms of their knowledge about rights of a client and
responsibilities of a provider.
Comprehensive reforms in the health sector, particularly, in governance structures, utilization
of both public and private sector resources are necessary.
Decentralized management
system and people's participation and support will make health programs cost-effective and
sustainable. Community involvement will accelerate the process of institutionalization of
accountability
Private sector participation needs to be streamlined through an appropriate policy for
generating competitive quality services as well as for cost-sharing. However a regulatory
capacity needs to be developed within the Government, which can protect the people and
particularly the poor from medical malpractice. However as with all regulatory interventions it
must be ensured that such an agency will not degenerate into rent-seeking whilst encouraging
every malpractice to persist and prosper.
Private sector services can be supplementary or complementary in nature under the
monitoring and regulating role of the government. Public sector will do well if it is geared up
and pressed in to interacting with the private sector, including the NGOs involved in the area of
public health care.
Keeping in view that incentives usually motivate people to perform, better-incentive
packages in various forms at different levels should be introduced. Such steps should bring
better rewards in terms of service delivery, management, etc.
Similarly, provision for
disincentives for failure to provide services could also play a positive role in improving the
quality of PHS.
Crisis in Governance of Public Health System - A Challenge of Humane Governance: A. Barkat
22
Provision for specialized training for medical personnel, specialized training for hospital
management and administration are urgently needed to ensure the smooth functioning of the
service centers. Provision for training program for local volunteers (with some benefits) is
another area for strengthening the health sector through involvement of the local community.
In the context of current global situation, particularly, the deteriorating situation in developing
countries, health planning and strategies should put adequate emphasis on environmental
health. It is noted that in recent times an added health threat from the arsenic contamination
of ground water has appeared and needs to be addressed with some urgency.
Prerequisites of any development initiative include the profiles of existing scenarios on the
basis of which planning and programming can be chalked out. For necessary amount of
promotion in the health sector, research and development (R&D) should get adequate
importance so that research findings in various areas can provide appropriate guidelines for
streamlining services and supplies.
The focus of donor coordination should be on improving the effectiveness of the health
system. The Ministry of Health should take the lead in managing external assistance in strict
compliance with an indigenously designed national health development strategy All external
resources must be deployed within the framework of the National Health Policy. Donors
should redesign their administrative, commercial and other interests with a view to establishing
an effective public health system.
Conclusion
The state of governance of public health in Bangladesh cannot be proclaimed as an example
of 'good governance’ from the view point of the people's right to access to and the availability
of quality services aiming at improving their health status. The major elements as to why
public health governance cannot be termed as a 'good one’ as summarized in Figure 1, are
related to the absence of a comprehensive public health system, lack of a people-oriented
public health policy, presence of a top-down planning mechanism devoid of people's
participation, inadequate public sector investment in primary health, inappropriate target
setting and resource allocation based not on actual priorities and morbidity-mortality patterns
and epidemiological findings, inefficiency in all sub-systems of management and in all sub
systems of service delivery, inadequate community involvement, inadequacies in integration
with other sectors, inadequate delegation of authority and responsibility, poor quality of care
and services, and lack of policy level commitment for providing good services. Thus, in order
to transform the governance of public health from a 'poor' (vicious cycle) to a 'good' and
humane' system (virtuous cycle), the only feasible solution would be to take comprehensive
measures to uproot the causes of poor governance in a phased-in and prioritized manner.
Considering the magnitude and nature of the crisis in governance of the public health system
in Bangladesh, a national consensus would be necessary to expedite the process of such a
transformation, whereby all three dimensions (economic, political, and civic) of "humane
governance” are recognized, internalized and realized.
Crisis in Governance of Public Health System - A Challenge of Humane Governance : A. Barkat
23
Figure 1: Transformation from 'Poor Governance' to "Humane Governance' of Public Health System in Bangladesh
Vicious cycle
Poor
Governance
1. Absence of public health
system
2. Lack of people -oriented public
health policy
3. Inadequate and inappropriate
public sector investment
4. Inefficiency in all sub-systems of
management! planning, organizing,
staffing,coordinating, leading,
controlling)
5. Inefficiency in all sub-systems
of service deliveryflogistics and
and supplies,training,MIS,IEC,etc )
6. Lack of inter-sectoral coordination
7. Poor quality of care
and services
8. Inadequate community
participation
Virtuous cycle
1. Institutionalization of a
public health system
2. Development of peopleoriented public health policy
3 Adequate and appropriate
public sector investment
4. Ensure accountability and
transparency of all sub-systems
of management
Humane
Good)
Governance
5. Ensure accountability and
transparency of all sub-systems
of service delivery
6. Institute strong inter-sectoral
coordination
7 Put highest priority on
quality of care and services
8 Ensure community involvement
at all stages (planning,
implementation,and monitoring)
Crisis in Governance of Public Health System- A Challenge of Humane Governance: A. Barkat
24
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Poverty & Health :
some experiences from the
Self Employed Women’s Association (SEWA), India.
By Shilpa Pandya
Coordinator, SEWA Insurance Team
Presented at
South Asian Dialogue on Poverty and Health
15111- 18(h November, Bangalore, India
Self Employed Women’s Association
SEWA Reception Centre,
Opposite Victoria Garden,
Bhadra,Ahmcdabad 380001
Gujarat, India.
Phone : 91 - 079 - 5506444 I 5506477
Fax : 91 -079-5506446
Email : Sewa.niahila@gnahd. globalnct.ems.vsnl.net. in
Web site : www.Sewa.Qrg
Introduction :
The Self Employed Women’s Association (SEWA) has been organising poor, self
employed women for over two decades now and supports their dibits to attain' full
employment and self reliance. 210,000 such workers of the unorganised sector arc
currently members of SEWA in six states.
Self Employed Women Workers - Our Members
The members of SEWA arc self employed women. They have no fixed employee
employer relationship and depend on their own labour for suivival. They are poor,
illiterate and vulnerable. They have minimum of assets or working capital. But they
are extremely economically active, contributing very significantly to the economy and
society with their labour. In fact, 64% of GDP is accounted for by the self-employed
of our country. These women come from different occupations mainly they are from
tliree categories:
1. Homebased workers like bidi rollers, insent stick makers, weavers, papad makers,
readymade garment workers, women who process agriculture products and
artisans.
2.
Vendors and hawkers like vegetable fruit, fish vendors, household goods and
cloths vendors.
3.
Sendee providers and manual labourers like construction workers, agriculture
workers, head loaders contract labourers, handcart pullers, domestic workers and
laundry workers.
.------ J—- ------------------------------------
—--------------------------------- —------
Self-Employed Women’s Association is a trade union. Since 1972 SEWA organises
poor self-employed women of different occupations. About 94% of women workers in
India are working in unorganised sector. Their contribution to the economy of their
family as well as to the nation is very much. But as their work is not counted they
remain invisible, hi fact, women workers themselves uncounted and invisible.
As these women are unorganised they do not obtain accesses like social security, legal
aid for instance, which the people of organised sector obtain so they have to spend
from their- limited income to get these facilities. Manytimes they cannot afford it.
SEWA’s main objectives are full employment and self reliance Full employment
means employment which gives the workers work security, income security, food
security and social security (at least health care, child care and shelter) SEWA
organises women to ensure that every family obtain full employment. By self reliance
we mean that women should be autonomous and self-reliant, individually and
collectively, both economically and in terms of their decision making ability.
At SEWA we organise women to achieve their goals of full employment and selfreliance through the strategy of struggle and development. The struggle is against many
constraints and limitations imposed on them by society and the economy. While
development activities strengthen women’s bargaining power and offer them new
alternatives. Practically, the strategy is carried out tlirough the joint action of union and
cooperatives. Gandliian thinking is the guiding force for SEWA's ’or, self-employed
members in organising for social change. We follow the principles of satya (truth),
ahimsa (non-violence), sarvadhanna (integrating all faiths, all people) and Khadi
(propagation of local employment and self-reliance).
SEWA is both an organisation and a movement. The SEWA movement is enhanced by
its being a ‘sangam’ or confluence of three movements. The labour movement, the
cooperative movement and the women’s movement. But it is also a movement of selfemployed workers their own, home grown movement with women as a leaders.
Tlirough their own movement women become strong and visible. Their- tremendous
economic and social contribution becomes recognised.
In the course of our organising work, the linkages between women’s work and women’s
health became apparent. For a poor woman her health is the only wealth. Her health and
work are inextricably linked:
1. Her work ollen affects her health. The work of women, working in the informal
section is manual and physically demanding. If often harms them. The longtime
,
I
working situation harms various parts of (heir body. Pregnant and feeding mothers
often work in circumstances that lead to miscarriage or affect the health of the child.
Occupation health is a major issue for poor women.
£
2.
Her health affects her work. As stated above in informal sector the work is mainly
manual. If the women are ill it affects their productivity' and there by their income.
Unfortunately, because of malnutrition, lack of care during pregnancy' and childbirth,
living in unsanitary conditions and lack of access to health cares most women arc in
poor physical (and often mental) health.
This causes a fall in productivity and income, leading to a cycle of deteriorating
health and increasing poverty. In addition, the costs of health care affect women. One
SEWA study found (hat on average women spend Rs. 800 per month on her own illness
and/or illness of her family members. For a poor women (his is a major expense. She
borrows at high interest rates and therefore goes .deeper hi the cycle of poverty and
indebtedness. SEWA Bank’s experience of last twenty five years of banking with poor
women has shown that health-related loans constitute a major percentage of the Bank’s
credit programme. Thus along with the work and health link, the connections between
poverty and health also became evident to us. From its inception SEWA began to take up
various health activities. However in 1984, SEWA began a community-based womcn-lcd
primary health care programme, hi 1998 we were providing health care to 75,000 women
out of our 1,50,000 membership hi Gujarat.
SEWA’s Health Care in 1998
Particulars
Health Education
Curative Care Health
Centre
Diagnostic Camps
Tuberculosis Control
Alimcdabad City
4,049
32,333
9 Districts
19,431
23,789
Total '
23,480
42,362
27,094
49,883
76,977
3,300
In order to provide low cost, good quality health care to women and to suppW
their efforts to come out of poverty SEW/V has-organised several health activities. A few
examples arc described below :
1. Once women organise around some economic activity, they also feel the need for
health care. In all 9 districts where SEWA is organising workers, wc have a health
cooperative and/or local economic organisation which is providing health care
including health education and curative care through community based health centres
run by women.
Based on our member’s needs, our Health Team has developed a health cducati^
module, providing simple health information to women. 40 SEWA promoted dairy
cooperatives and 1200 village based savings groups have been involved in this
process of health education, among others.
hi 1998, a total of 23,480 women participated in health training. This training is
provided by SEWA trained dais and community health workers (CHWs). A small fee
for health education is also colkx.cd by the health workers cooperatives conducting
tlic training.
2. Ln recent years we have observed the escalating costs of medical care. In fact, as
mentioned earlier, our studies revealed that women spend about Rs 800 per month on
their own illness and that of their family members. In the rural areas, geographical
considerations (distance from health facilities), lack of transport and costs of this as
well as services result in women not utilising health services. /\lso, women lead lives
full of work and struggle and rarely consider their own health a priority.
Hence SEWA organises mobile clinics at women’s doorsteps. Doctors provide
diagnostic services and curative care in one central village or urban ‘mohalla’
(neighbourhood). The focus is on women’s health, children’s health and occasionally
general health problems.
Mobile clinics conducted in 1998
Type of Camp
3.
No. of Camps
No. of womcn/Children
Reproductive Health
40
17,271
Cliild Health
12
3,000
Women’s occupational health issues have been a central concern of SEWA since it
inception. Being a trade union, a women’s work-linked health status immediately
came to our attention. We have conducted a number of studies over the years to bring
out the connections between women’s work and their health. These include studies on
bidi workers, readymade garment workers, masala grinders insent stick rollers, salt
workers, tobacco workers, agricultural labourers and others. We have tried to develop
protective equipment and safer processes. For example, we have recently provided
300 agricultural labourers with specially designed sickles which reduce the strain on
the body and enhance their productivity. These have been so well received that now
our members arc themselves buying the sickles at Rs 40 per piece I
We also provide curative care for occupational conditions and regular eye check-ups
for our members, especially those involved in sewing and embroidery work.
4.
SEWA also encourages low cost, alternative medical therapies. We gave a training of
accupressure to our health workers. It becomes helpful to them to increase their
income by giving accupressure treatment. Similarly we encourage the use of herbal
and ayurvedic medicines which arc cheaper and also easily available. We have
developed health education material like a booklet “Jamku ni Cliliajali” (On Jamku’s
.
Shelf) giving information about common plants and herbs like turmeric which have
medicinal value.
5.
Tuberculosis has been our concent for many years now, as it is a common problem
faced by our members and their families. In 1993, we stalled a joint T.B. control
programme with our state govenuuent. In 1998, we look responsibility for T.B.
control in two working class wards of Altmedabad. In collaboration with our
Municipal Corporation and the WHO, we are running screening centres with fully
equipped laboratories in these areas. We have also trained DOTS workers under the
new RNTCP programme for T.B. control. This year, 5000 persons have been
screened and 470 put on the DOTS therapy. Thus SEWA too has joined lite struggle to
combat this deadly disease which generally results in economic ruin of many poor
families because of the high costs involved in treatment.
6.
Even after these when a poor woman fall sick she sutlers a lot. On one hand she is
unable to work and loses her income. On the other hand she has to spend considerable
sums to improve her health. This situation takes her further into the cycle of
indebtedness and poverty. So to support these women in times of such crisis, in 1992
SEWA started an integrated insurance scheme which insuies her life, health, house
and assets. According to this scheme women gel the coverage of Rs. 1200 against the
hospitalisation expenses of their illness. A special benefit for maternity is also
provided to the members under this scheme. In addition to give them faster and
efficient service
this scheme was decentralised. It is not a welfare scheme. Our
members pay premium of Rs 65 per annum to get the advantage of the insurance
scheme. The last seven years experience of SEWA shows that poor need health and
other protective insurance. We have also learned that running insurance schemes for
and by the poor provide concrete economic support to them and that such schemes are
economically viable as well.
Poverty and Health : lessons form SEWA’s experiences
In the past fifteen years of intensive work with women on health issues, we have learned
several lessons on the linkages between poverty and health. Some of these are mentioned
below.
1. Full employment is the main need of poor women and their families. By full
employment, women mean such employment that gives them and their families work
and income security, food security and social security. As far as social security is
concerned, our experience points to the need for health care, child care insurance and
housing. Time and again, our members emphasize that all they want is full
employment. If this is attained, then women and their families can come out of
poverty. Thus for poor women, access to healthcare and safeguarding their health is
very much a part of the struggle against poverty.
The way women strive for full employment is through organising. They organise into
groups of all sizes and around several issues. Some of our most active groups are
those organised around the issue of savings and credit. Over 1200 savings and credit
gioups have been organised by SEWA Bank.
When we organise such savings groups, the need for health care quickly emerges. In
our experience, a new SEWA health centre or health education group often develops
from the demands of savings group members. On the other hand, our health work
had led to promotion of several small groups — savings gioups, groups working on
some economic activity and even child care centres. For example, in the past six
months, SEWA trained community health workers and dais have helped form 100
savings and credit groups in the villages. Thus health activity can lead to further
organising of poor women aimed at asset creation, income - generation and thereby
poverty alleviation. And conversely, economic activities, aimed at full employment
and poverty alleviation, must include health.
2. Health care is very much part of Social Security required by poor women. It should
be integrated with other Social Security activities like child care, insurance and
housing, in order to be truly effective. And of course, it should be provided in a
manner that is linked to women’s work. For example, when organising a women’s
embroidery group, our members arc careful to ensure that some of their earnings arc
set aside for health education and purchase of drugs. Or looking to the reality of salt
workers, mobile clinics are mobilised from government to ensure that health care
reaches these poorest of workers in the deserts where they live and manufacturer salt
from brine, pumped out of the earth..
The idea of a social security fund has already been mooted by poor women, with their
own contributions. Some savings groups have started a medical emergency fund or
child care fund. Each women sets aside some of her savings each month and
contributes this to her group’s fund. And thus slowly a group-owned social security
fund develops.
SEWA believes these micro efforts should be transferred to macro level policy
changes. We have been arguing for the need for a national level social security fund
for all workers of tire unorganised sector. Currently discussions are underway with
the labour ministry as to how this should be developed and more importantly, how the
services and benefits thus developed should reach the workers in all parts of the
country.
3.
As far as provision of health care is concerned we have learned that poor women will
contribute towards these, even pay for them fully, as far as possible. But the services
themselves should be according to their needs, of good quality, affordable and at their
doorsteps. Poor women reject free services of indifferent quality and provided in an
inappropriate manner. They rather pay large amounts for private care than opt for low
quality free services.
4.
Finally and most importantly SEWA's experience with the fight against poverty has
shown that this can only achieved if the poor especially women arc organised and
form (heir own local, preferably women-lcd economic
organisations. Once the poor
organise i.c. come together around common needs and issues, they may form their
own banks their own collective business (handicraft, agriculture, dairying, salt
farming, minor forest produce collection) and even their own health cooperatives.
Our experience has been that when poor women themselves own, manage and run
their own organisations, they are able to come out of poverty, have better health status
and overall better quality of life. Of course it is a slow and difficult process, full of
challenges constraints and even sacrifices on the part of women. It is the process of
social change. It is this change which then both safeguards a woman’s health and
helps her to emerge from poverty.
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